Paul Singer

The head of the US hedge fund Elliott is known for his actionism.

(Photo: REUTERS)

new York Paul Singer struck again. The head of the US hedge fund Elliott Management is said to have bought a larger share of Twitter shares and is pushing for changes, US media reported over the weekend.

Accordingly, he nominated four candidates for the board of directors of the social network. At the Annual General Meeting in May, however, only three positions will become vacant. Observers therefore believe that the investor, known for his activism, will also push for the resignation of Twitter boss Jack Dorsey, who is also on the board of directors, but does not have to be re-elected as planned until 2022.

Dorsey is one of three co-founders of Twitter and has been under pressure for months. The short message service has played a central role in politics since the election of US President Donald Trump. The Republican uses the network like no other head of state to spread his views and criticize his opponents. Economically, however, Twitter is significantly behind other social networks such as Facebook and Snap.

Dorsey, who also runs the listed Fintech Square, which he also founded, was already CEO after Twitter’s founding in 2006. Then he let others go ahead and returned as CEO in July 2015. Since then, the stock has lost 6.2 percent, while Facebook’s paper has increased by 121 percent.

Twitter boss under pressure

At the end of October, the Twitter share dropped by more than 20 percent after weak quarterly figures. Critics complain that Twitter has focused too much on its core business, while other networks with stories, filters and other features have steadily expanded their offerings. Dorsey’s plan to spend three to six months in Africa in 2020 also caused concern.

Professor Scott Galloway from New York University then wrote an open letter to the board of directors Omid Kordestani entitled “Now it’s enough” in which he demanded Dorsey’s resignation. Galloway is a key opinion leader in the technology industry.
The short message service is particularly attractive for investors like Elliott. There is only one share class, so Singer can gain influence much more easily than on Facebook and Snap, where the founders control the majority of voting rights via a separate share class.

Paul Singer is an influential donor to the Republican Party. The 75-year-old billionaire initially campaigned against the election of US President Donald Trump, but then changed his mind. Singer is known for its strategies to put pressure on companies. It was not known until early February that he had increased his stake in the Japanese technology group Softbank.

He wants to urge management to take measures that drive up the company’s share price. Singer often tries to make a difference in the background. If this fails, he usually goes to the public with tough demands. His hedge fund is also active in Germany and joined Thyssen-Krupp and Bayer, among others. The Twitter share rose by almost eight percent in after-hours trading.

More: Why Nobel laureate Joseph Stiglitz calls for a reform of capitalism in his new book.

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