Elliott Management Corp. has nominated four directors to the board at Twitter Inc., according to a person familiar with the matter, setting the stage for a potential showdown between one of the most prolific and pugnacious activist hedge funds and the influential social-media company.

Elliott has taken a roughly $1 billion stake and been in talks with Twitter management about its desire for the company to find a full-time chief executive officer, the person said. That most likely would involve replacing co-founder Jack Dorsey, who began a second stint as the company’s CEO in 2015. In addition to his role at Twitter

TWTR, +0.58%

 , Dorsey leads Square Inc.

SQ, +5.07%

 , a financial-technology firm he also co-founded.

In November, Dorsey said via a tweet that he planned to live in Africa for three-to-six months this year. The announcement surprised executives at Twitter and angered investors frustrated with the company’s performance under the part-time CEO. Twitter’s shares and financial performance have long lagged behind its popularity and influence in culture and politics. Its market capitalization, at around $26 billion, is a fraction of that of rival social-media platform Facebook Inc.

FB, +1.43%

 

Elliott is known for battles with companies such as Arconic Inc.

ARNC, -3.39%

  and AT&T Inc.

T, -1.43%

 and campaigns against Peru and Argentina, pressuring the countries to make payments on defaulted bonds. It recently revealed an interest in Japanese telecommunications-and-technology giant SoftBank Group

9984, -4.31%

 .

An expanded version of this report appears on WSJ.com:

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2020-03-01