Twitter CEO Dick Costolo will resign his post July 1, but what does this mean for the company? Twitter’s stock price spiked sharply after the announcement, but quickly fell back to normal levels.
For now, co-founder and current Square CEO Jack Dorsey will lead both companies until a suitable replacement is found. A surprising candidate from California has also thrown his hat into the ring.
In a conference call Thursday, both Costolo and Dorsey stressed that the decision has nothing to do with external pressure from shareholders who have been expecting more from the company. The constant message spoken throughout the call was that Costolo has been planning his exit for a while and is doing this of his own volition.
Costolo — who will not receive a severance package because he’s leaving voluntarily — addressed his resignation in the call:
We agreed now is the right time to begin this transition. There’s never a perfect time for a transition like this. But given the company’s very strong team … we as a board are confident that we can execute a smooth transition.
Costolo, in the call and in interviews with Business Insider and CNBC, didn’t directly address the “why” of his decision, focusing on what will happen after his departure.
Costolo told CNBC that the time simply felt right to step down:
At the end of the last year, as Jack mentioned, I started talking to the board about transitioning. I wanted to make sure we were doing it when the team that was in place was strong, was working well together and they were forthright with each other.
They engaged directly with each other and they resolved conflicts together without me always having to step in and I started to see that at the end of the year, and at the most recent board meeting just last week we had a good long three hour conversation at the end of the board meeting about the state of the team that is healthy, maybe healthier than I’ve ever seen it.
As Jack mentioned, the cadence of the product execution has been better that i’ve ever seen it, and with the new services like fabric doing so well and Periscope one of the hottest and greatest new native mobile video apps in the market, it was the right time.
However, others feel that Costolo was externally pressured to step down. Weeks after Twitter came under pressure for a weaker-than-expected Q1, prominent investor Chris Sacca wrote a long post, offering advice to Twitter (own real time and make it easier for novice/new users to get relevant tweets immediately and without effort).
Will McInnes, CMO of Brandwatch, is watching Twitter’s moves with a close eye to see where the company goes for its next CEO:
It’s all about where Twitter goes from here. This social media company, this tech giant, now has to make an important choice in selecting a new CEO. But in making this selection, whether from an internal candidate or by bringing in fresh blood, Twitter will actually be choosing its future company strategy.
Will it be a big advertising name, a tech innovator with a proven record of success, or will they go with a dark horse risky entrepreneur with a rebellious streak?
Given Wall Street’s influence on Costolo’s departure, all signs lead to the former option, the safe choice of going with a proven exec with a strong record in advertising.
Hannah Maundrell, editor in chief at Money.co.uk, commented on how Costolo’s decision affected the stock market:
The market is evidently pleased with the news Dick Costolo is making a swift exit as Twitter CEO but the big question is whether the uplift will last. The company needs focus and direction but sharing stand-in CEO Jack Dorsey with his other billion dollar business isn’t a long term solution. Twitter needs to find a permanent replacement quickly to avoid uncertainty playing havoc with its share price.
Wall Street notwithstanding, Costolo did leave quite the impression on Twitter employees. Shortly after his resignation was announced, #ThankYouDickC was a trending topic in the U.S. and San Francisco as employees expressed gratitude:
— Anthony Noto (@anthonynoto) June 11, 2015
— Alex Kowalsky (@alexmk) June 11, 2015
With so much drama out on Market Street, it’s kind of hard to see who will replace Dick C. But one prominent user from Long Beach, Calif., offered his services — legendary rapper Snoop Dogg.
— Snoop Dogg (@SnoopDogg) June 11, 2015
Readers: Who do you want to see as the new Twitter CEO?
Image courtesy of Getty Images.