Twitter COO's Departure Doesn't Suggest a Turnaround or Sale Is Near

This article originally appeared on Real Money on Nov. 7, 2016.

Over the past two years, Twitter (TWTR)  has been synonymous with executive departures nearly as much as it has been with political arguments, sports video clips and poor revenue guidance. The latest departure is one of its biggest, and could say things about the company's ad performance and acquisition odds.

Adam Bain, Twitter's COO and a one-time CEO candidate, is stepping down. Anthony Noto, the former Goldman banker and NFL CFO who has been Twitter's finance chief since July 2014, will replace Bain, while also continuing to serve as CFO until a new one is named.

As COO, Noto will take over Twitter's "revenue generating organizations including global advertising sales, data, revenue product, and [mobile ad exchange] MoPub, as well as global partnerships and business development," while maintaining control of its burgeoning live content efforts.

The change makes Noto, whose authority at Twitter has gone beyond that of your standard CFO, the microblogging platform's clear second-in-command, behind CEO Jack Dorsey. And Dorsey, of course, still spends part of his time working as Square's (SQ)  CEO.

Twitter shares fell in after-hours trading Wednesday and were down 2.9% to $18.58 in early trading Thursday.

Bain's departure follows a third-quarter earnings report in which Twitter (though beating estimates) reported its annual revenue growth fell to 8% from Q2's 20%, Q1's 36%, and Q4 2015's 48%, with ad sales growth dropping to a mere 6%.

Anemic user growth, weak execution and stiff social media ad competition from Facebook (FB)  -- where Q3 ad sales rose 59% -- are taking a toll.

Moreover, Twitter declined to give forward sales guidance for the first time in its history as a public firm. It cited the impact of a restructuring through which 9% of Twitter's workforce, which has arguably been oversized for a company with its revenue base and growth profile, is being laid off.

Twitter reportedly explored a sale in September and October, only to see potential suitors such as Salesforce.com (CRM) , Disney  (DIS) and Alphabet/Google (GOOGL)  back off. Shares are trading right around where they were before the first sale process reports arrived on Sept. 23, and are down 75% from a December 2013 post-IPO peak of $74.73.

Replacing the executive in charge of sales, advertising and business development operations in a year that has seen nosediving ad sales growth, and just weeks after the company broke with a tradition of providing sales guidance with earnings, doesn't exactly instill confidence that conditions are set to improve.

And the fact that Dorsey just signed off on such a big management change doesn't make it look as if a sale is considered likely in the near-term.

It's possible that one or both of these presumed implications of Bain's exit will eventually prove off the mark. However, given its recent history, it's hard to give Twitter the benefit of the doubt right now.

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