Activist investor Carl Icahn is once again in the news, this time in the tech world as rumors suggest that Icahn may well be on his way to acquiring a sizable stake in Twitter, a report said.
Twitter stock rose as much as 8% yesterday, closing up 6.6% to $38.76 despite a broader market sell off as reports of Icahn grabbing a significant share in the company broke out. The speculation also coincided with rumors of Twitter buying Yahoo’s core business operations in the near future, Bidness Etc said.
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Icahn’s possible intentions were revealed in the form of a prediction by prominent fund manager Doug Kass, who expects Icahn to take a 9.9% stake in Twitter which could result in a bidding war between Google and social media rival Facebook, the report said.
Many speculators are of the view that Icahn will work on ousting Twitter CEO Dick Costolo, perhaps even by taking up the position as the company’s CEO himself. Twitter has been going through a plethora of management problems lately, much of which revolve around disagreements with Costolo, according to Bidness.
Last year saw the departure of several key executives including Vice President Micheal Slippey, Creative Director Doug Bowman, Senior Vice President of Engineering Chris Fry and Chief Operating Officer Ali Rowghani whose departures were primarily attributed to clashes with the CEO, the report said.
According to an article published in the Wall Street Journal employees think of Costolo as a person who does not really have a clear direction, going from one idea to another within short spans of time with many of those who are close to Costolo sensing that his vision for the company has become increasingly incoherent since Twitter’s IPO, Bidness said.
Perhaps speculators are not entirely wrong in assuming that Icahn’s first course of action will be to remove the CEO given that Costolo comes off as the crux of the difficulties Twitter has been facing as of late, the report said.
Perception regarding Icahn’s participation in corporate entities is generally positive among business circles. He is known as someone who greatly values shareholder wealth due to his constant focus on substantial changes in a firm’s workings that could result in a rise in stockholder value, according to the report.
Icahn may very well be what Twitter desperately needs right now if it is to grow and sustain its business model in the long run, the report said.
