In December, we talked to a major institutional Twitter shareholder who was very frustrated with CEO Dick Costolo.
Costolo was getting hammered for selling shares through an automated program.
Though, as Twitter was quick to note, it was a small fraction of Costolo’s overall holdings. And, further, other executives at recently IPO’d companies had also sold more shares without getting the same blow back.
Regardless, the share sales touched a nerve, and our shareholder source said:
Selling stock speaks louder than any words. As the CEO, how do you look the employees in the eye when you are busy grabbing a lifeboat? He has lost their respect, and obviously the respect of the market. The people who work at Twitter know the potential, and they know he is an obstacle to achieving it. He shouldn’t be running the company anymore.
We decided to talk to the shareholder again this week. Were those words just a heated response to seeing the CEO sell shares? Costolo, and Twitter, have done a better job of executing lately. There have been half a dozen product features rolled out for Twitter in the past month. Is our shareholder source still upset?
Here’s what he said:
- The board level support makes me cringe. Until those guys stop selling their shares, I don’t place much value on what they say. Actions speak louder. Dick’s continued selling remains a disgrace. I expect they will all stop those automatic selling plans soon if they want to salvage their reputations.
- The company has certainly picked up its pace of execution. But, what has changed since their slothful days under Dick’s leadership is the promotion of Kevin Weil to run the entire product org. Dick shouldn’t be getting credit for Kevin’s ability to get shit done.
- Twitter would still be better off without Dick.
So, that’s a yes. Still upset.
It’s unclear what this means for Costolo, or for Twitter. Costolo has support of the board, so he’s not going anywhere.
Twitter reports earnings tonight. If they’re good, it should take some of the heat off Costolo. If they’re bad, we expect to hear more and more people like this shareholder.
For what it’s worth, it seems like Costolo has Twitter pointed in the right direction. Twitter’s product updates are coming fast and furious. He can make a compelling, and credible argument that Twitter is bigger than just the people that use Twitter thanks to selling ads on other sites, and logged out users hitting Twitter.com.