Jack Dorsey resigns as CEO of Twitter

Twitter co-founder Jack Dorsey will step down as the company's chief executive officer and will be replaced by Parag Agrawal, the company's chief technical officer.

Dorsey is also CEO of payment firm Square

Jack Dorsey, seen testifying before the Senate Intelligence Committee in Washington, D.C., in September 2018, is no longer CEO of Twitter, the company he co-founded. (Jose Luis Magana/The Associated Press)

Twitter co-founder Jack Dorsey will step down as the company's chief executive officer.

The billionaire CEO announced in a tweet that he is stepping down, to be replaced by Parag Agrawal, who is the company's chief technical officer.

Among other duties, Agrawal is developing standards to control abusive and misleading information.

"I want you all to know that this is my decision and I own it," Dorsey said, adding that Agrawal "has been my choice for some time, given how deeply he understands the company and its needs."

Dorsey co-founded the microblogging site in 2006 and became CEO the next year. But, two years later he was pushed out as chief executive by two other co-founders, Ev Williams and board member Fred Wilson.

After years of stagnant growth and a slumping share price since its IPO in 2013, Dorsey returned as CEO in 2015.

At the time, Dorsey was also CEO of Square, a payments processing company that he founded after he left Twitter. But instead of leaving Square, he took the unusual step of continuing to be CEO of both companies. Powerful investors in both companies didn't like that arrangement from the start, and in recent months many have started openly calling for it to end. 

Since Square went public in 2015, its shares have gone up by more than 2,300 per cent. Twitter, meanwhile, has not even doubled over that period.

Bloomberg Intelligence analyst Mandeep Singh says the move is a good one for the company which has fallen far behind other social media companies like Facebook, Snap and TikTok financially, at a time when demand for such services keeps rising.

"Jack Dorsey's exit as CEO is a good strategic move that could help Twitter speed user growth and expand advertisers beyond large brands," Singh said in a note to clients. "Given greater exposure to live sports and entertainment than other social-media platforms, we believe Twitter may seek deals and focus on partnerships to improve its … positioning."

Last year, New York hedge fund Elliott Management Corp. accused Dorsey of ignoring Twitter in favour of Square, and asked him to step down. Dorsey fended off the pressure by giving Elliott and its ally, buyout firm Silver Lake Partners, seats on Twitter's board.

Elliott also welcome the move. "We look forward to the next chapter of Twitter's story," managing partner Jesse Cohn said. "Having gotten to know both incoming Chairman Bret Taylor and incoming CEO Parag Agrawal, we are confident that they are the right leaders for Twitter at this pivotal moment for the company."