Twitter’s new CEO, Jack Dorsey, plans to give around one-third of the stake he holds in the micro-blogging firm to an employee equity pool. Dorsey’s one-third stake equals about 1% of Twitter.
Dorsey aims to better ties with Twitter employees
Announcing his intent, Dorsey tweeted late Thursday, “I’m giving around 1/3 of my Twitter stock (exactly 1 percent of the company) to our employee equity pool to reinvest directly in our people.” Speaking about his decision, Dorsey said he would prefer to have a smaller part of something big than having a bigger part of something small. The CEO said he is confident that Twitter can be made big with their joint efforts.
Dorsey will be left with a 2.23% stake in the company after giving up one-third of his stake but will remain Twitter’s seventh largest shareholder. Twitter planned to cut around 8% of its global workforce, which could have led to uncertainties in the relationship with its employees. But with the latest move, Dorsey aims to improve this.
Dorsey is one of Twitter’s co-founders, and the company named him as permanent CEO earlier this month after he served as interim CEO for more than 100 days since July. The company’s earnings for the second quarter were disappointing, raising further concerns about user growth, which led to the exit of the previous CEO, Dick Costolo.
Dorsey doing things right
Dorsey is looking for ways to push the innovation pace at the company and motivate employees at a time when the company is growing through a tough phase. He is keeping the release of new features at a steady level and recently introduced Moments, which offers a collection of the best tweets from live events.
Last week, Dorsey oversaw the first mass layoff in Twitter’s nine-year history. And at Twitter’s second annual mobile conference this week, Dorsey apologized to software developers and assured them of a better relationship ahead.
On Wednesday, Brian Nowak of Morgan Stanley downgraded Twitter’s stock from Equal Weight to Under Weight, as he doesn’t expect the firm to be able to meet Wall Street estimates in the future. Nowak’s sales forecast for 2017 is 18% less than the consensus, while his earnings estimate is 25% lower than those of Wall Street.
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On Thursday, Twitter shares closed down 0.48% at $29.16.