Samantha SharfForbes Staff
Twitter TWTR +0.98% shares popped more than 7% to about $38.50 in after hours trading Thursday after the social network announced CEO Dick Costolo would step down effective July 1. Co-founder and Chairman Jack Dorseywill take over as interim CEO while the company searches for a full time replacement. Costolo will remain a member of Twitter’s board of directors.
Shares took a nosedive in late April after the company reported weak earnings and have staying on the low end of the 52-week range since. Prior to the bump from the news the stock was down close to 3% year-over-year closing at $35.84 Thursday. This left the stock down 20% from its November 2013 initial public offering.
In a note on the news S&P Capital IQ Analyst Scott Kessler wrote, “We see this as significant news, showing TWTR is open to important change. We also note TWTR reiterated its Q2 guidance, which we see as a positive after the mixed results and outlook provided in April.”
“There is no one better than Jack Dorsey to lead Twitter during this transition,” said Costolo in a statement. “He has a profound understanding of the product and Twitter’s mission in the world as well as a great relationship with Twitter’s leadership team.”
For his part Dorsey added, “The future belongs to Twitter thanks in large part to Dick Costolo’s dedication and vision. Dick has put a world-class team in place and created a great foundation from which Twitter can continue to change the world and grow. We have an exciting lineup of products and initiatives coming to market, and I look forward to continuing to execute our strategy while helping facilitate a smooth transition as the Board conducts its search.”
Twitter also reiterated its second quarter forecast for revenue between $470 million and $485 million.
For more details as this story develops see Kathleen Chaykowski’s, “Twitter’s CEO Costolo Steps Down, Dorsey Returns As Interim CEO“
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