Agrawal Appointed Twitter CEO, Dorsey Resigns

Parag Agrawal, Twitter’s former chief technology officer has been announced as the new chief executive officer (CEO) and a member of the board of the company.

This followed an announcement yesterday by Jack Dorsey, 45, who co-founded the company in 2006, that he was stepping down from his role as CEO.

Dorsey’s announcement prompted wild swings in the social media platform’s share price.

Posting on the social media platform, Sky News quoted him to have written, "finally time for me to leave", explaining in a statement from Twitter itself that it was, "because I believe the company is ready to move on from its founders".

Agrawal, said he was "honoured and humbled" by the appointment.

“Deep gratitude for @jack and our entire team, and so much excitement for the future. Here’s the note I sent to the company. Thank you all for your trust and support,” the new CEO Twitted.

Shares in the social media platform rose nine per cent on market opening on Monday morning following a report by CNBC that Dorsey was to leave his role.

Trading was halted on the New York Stock Exchange after the spike, but shares resumed trading with a gain of more than 4.5 per cent ahead of where they started the day.

However the gains later fell away and the stock closed two per cent below its opening price.

Dorsey will remain the chief executive of financial payments company, Square, which has a market capitalisation of over $98 billion (£73 billion) compared to Twitter's $38 billion (£28 billion).

Dorsey faced ousting last year when Twitter stakeholder Paul Singer, the found of Elliott Management, publicly questioned his ability to run both companies at the same time.

The investment firm eventually reached a deal with Twitter's management.

“It is no surprise to see Jack Dorsey stepping down as chief executive of Twitter. There has been disquiet for some time among shareholders at Dorsey serving in that role and also at Square, the fintech payments company he co-founded, with Paul Singer – the head of the influential activist investor Elliott Management – having called in the recent past for him to step down at Twitter,” the report stated.

Dorsey made peace with Singer on that occasion by giving Elliott and its ally, the private equity firm Silver lake, seats on the Twitter board.

But ultimately the arrangement was unsustainable and given the comparative size of the two businesses, with Square valued at $97 billion and Twitter at just $37 billion, it was obvious which one he would opt for if made to choose between the two.

Moreover, Square is becoming an infinitely more demanding business to manage, with Dorsey recently announcing plans for the company to look into running an open-source Bitcoin mining system.

Something had to give and just about the only significant obstacle to Mr Dorsey stepping down at Twitter was the need to find his successor.

It seems that hurdle has now been cleared.

Following the announcement, executives at Elliott said in a statement on the appointment of Agrawal and new chairman Bret Taylor that they were "confident that they are the right leaders for Twitter at this pivotal moment for the company".

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: ''Such has been the consternation surrounding Jack Dorsey's 'parttime' role as CEO of Twitter, that it's little surprise investors initially reacted positively to speculation that he was leaving the platform.

"But the initial euphoria fizzled out, as the new pick for the driving seat, Parag Agrawal, the current chief technology officer, appeared to underwhelm investors.

"The realisation of the mountain to scale and some disappointment that a Twitter outsider hasn't been brought in to offer fresh ideas, is likely to be behind the loss of initial gains."

Agrawal is an engineer who worked his way up over the past decade to become the company’s technology chief.

Agrawal had been Jack Dorsey’s closest partner in thinking about the future of the Twitter platform and decentralising social media, a former company executive told CNBC.