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Twitter's (TWTR) High Profile Executive Departures Continue

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Twitter Inc (TWTR - Free Report) continues to face high profile executive departures. Anthony Bain, its COO, has stepped down from his position in order to pursue “new opportunities”. Bain had been associated with Twitter since 2010. Chief financial officer Anthony Noto will take over Bain’s responsibilities while Twitter searches for a new CFO.

In January this year, Twitter media head Katie Jacobs Stanton, product head Kevin Weil, engineering division head Alex Roetter, and HR head Brian ‘Skip’ Schipper quit the company. Vine manager Jason Toff also had then tweeted about his decision to resign and headed back to Google. In May, it was reported that the chief of business development, Jana Messerschmidt and chief of media and commerce Nathan Hubbard, were also quitting.

The loss of key personnel especially at a time when the company is passing through one of its toughest phases isn’t making things any easier. Twitter has lost nearly 27% of its market cap in the past one year.

Investors have been on the edge for quite some time now and one can hardly blame them given the dismal share price movement and unimpressive user growth rate. Last month, we saw heightened buyout speculations for Twitter, which fizzled later on, much to investors’ dismay. Right from Alphabet (GOOGL - Free Report) to Salesforce (CRM - Free Report) to The Walt Disney Company (DIS - Free Report) , all were speculated to have shown interest in buying the micro blogging site but reportedly pulled out.

A hefty price tag was widely considered to be the major reason behind the withdrawal of once-interested suitors apart from flailing user growth and advertising revenues. Not to forget, the infamous instances of trolling that have been accused of scaring away interested buyers.

Twitter’s CEO Jack Dorsey has a Herculean task of pacifying agitated investors. With no potential suitor in sight, Twitter needs to work single-handedly to bring about that ever elusive turnaround. We believe that focus on live and user friendly changes could do the trick for Twitter but it is going to be time consuming. Also, Twitter is slashing 9% of its workforce.

Layoffs had long been anticipated as the company charts a solo strategy to turn things around. It’s a no-brainer that cost cutting will be an integral part of the strategy. Twitter reportedly has over 3.8K employees. Also, after announcing the closure of Vine, Twitter is now reportedly mulling a sale of the short video service app. 

At present, Twitter has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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