Jack Dorsey Leaving Twitter to Focus on Bitcoin (Comprehensive)

Jack Dorsey CEO. (Photo by CNBC)

[Asia Economy Reporter Yujin Cho] Jack Dorsey, co-founder of social media platform Twitter, is stepping down from his position as Chief Executive Officer (CEO). This resignation comes six years after his return as CEO in 2015, following his ousting in a management dispute two years after Twitter's founding. Although Dorsey did not specify the exact reasons for his resignation, it is interpreted as a move to focus on managing Square, where he also serves concurrently. Square, founded by Dorsey and a prominent Bitcoin advocate, recently began Bitcoin trading, increasing its valuation to three times that of Twitter.

According to the Wall Street Journal (WSJ) and others on the 29th (local time), CEO Dorsey announced on his Twitter account, "I am stepping down as CEO," adding, "The company is ready to move on from its founder, so I have decided to leave." He further stated, "Ultimately, I believe founder-led companies seriously constrain management and can damage the entire system," and emphasized, "It is important for the company to be independent from the founder's influence or directives," expressing his intention to resign.

Dorsey will remain a board member until the shareholders' meeting in May next year and is expected to leave the board afterward, completely stepping away from Twitter's management. Twitter’s next CEO will be Parag Agrawal, the current Chief Technology Officer (CTO), while Brett Taylor, a Twitter board member and President and Chief Operating Officer (COO) of Salesforce, will serve as the board chairman.

Dorsey initially served as CEO shortly after Twitter’s launch in 2006 but was ousted in 2008 following a management dispute with co-founders. He returned as CEO in 2015 when the company struggled with user stagnation and stock price decline.

WSJ cited that Dorsey’s resignation decision was influenced by leadership challenges from activist investors on Wall Street since last year. Elliott Management, a U.S. activist hedge fund, acquired a significant stake in Twitter in March last year and demanded a CEO change. Elliott founder Paul Singer warned that Dorsey’s dual role as CEO of mobile payments company Square distracted him from focusing on Twitter and argued that Dorsey should step down from one of the two publicly traded companies to concentrate on management.

Ultimately, Twitter agreed to appoint two new directors and committed to spending $2 billion (approximately 2.39 trillion KRW) on share buybacks despite the uncertain management environment during the early COVID-19 period, leading to an agreement with Elliott for Dorsey to remain as CEO.

Dorsey did not elaborate on the background of his resignation or his future plans, but industry insiders believe he is leaving Twitter to focus on cryptocurrency-related services such as Bitcoin. Bloomberg reported that when Dorsey returned as CEO in 2015, many analysts and investors predicted he would eventually leave Twitter to concentrate on managing Square, which he founded.

Since Dorsey’s return as CEO, Twitter’s stock price has risen more than 67%, but it has not matched the growth of other social media platforms like Facebook and Snapchat. During this period, Square began Bitcoin trading, achieving significant revenue growth, and its market capitalization reached $98.2 billion (based on the closing price that day), nearly three times Twitter’s market cap of $36.6 billion. As a result, over $10 billion of Dorsey’s net worth of $12.3 billion (approximately 14.65 trillion KRW) is tied to his Square shares.

In October, Dorsey hinted that Square would enter the Bitcoin mining business, and earlier this month, he announced plans to launch 'tbDEX,' a proprietary decentralized exchange for buying and selling cryptocurrencies.

The appointment of Agrawal as Dorsey’s successor also reflects Dorsey’s passion for Bitcoin, according to the report. Agrawal, appointed CTO in 2017, has played a key role in the open-source project Bluesky, which develops decentralized technology for social media. Dorsey’s choice of Agrawal as his successor signals Twitter’s intention to expand into Bitcoin-related services, the report added.

After successfully introducing Bitcoin trading to Square in 2019, Dorsey has expressed plans to integrate digital assets into Twitter’s future. As part of this, Twitter established and is operating a dedicated 'Crypto Team' last month to accelerate its cryptocurrency business.

Meanwhile, in his resignation statement released that day, Dorsey expressed confidence in Agrawal. He said, "Parag’s work over the past decade has been truly transformative," adding, "He has been deeply involved in our business as an engineer, and now it is time for him to lead Twitter." In response, Agrawal expressed gratitude for the board’s trust in his leadership and Dorsey’s ongoing mentorship, support, and partnership, stating, "Building on the foundation Jack established, we will reshape the future of social media to deliver great value to customers and shareholders."