Square (SQ) Will Benefit from Dorsey’s Leaving Twitter

As we already know, Twitter's (TWTR) CEO Jack Dorsey profoundly stepped down from his permanent position of the company’s CEO – we speculate, in order to focus on his second loved child, Square (SQ).

Current Twitter’s Chief Technology Officer Parag Agrawal will succeed him in that role, effective immediately, the company says.

The Indian-born Agrawal graduated from IIT Bombay with Bachelor’s in Technology and a Master’s in Science and PhD from Stanford University in California. Agrawal held research intern positions at Microsoft (MSFT), Yahoo! and AT&T (T) Labs prior to joining Twitter in October 2011 as an advertisements engineer.

Agrawal is known to Elliott Investment Management, a major Twitter stakeholder which sought to remove Dorsey from his position last year by raising concerns about his ability to simultaneously run Twitter and Square (SQ). The company issued a statement on behalf of Managing Partner Jesse Cohn and Senior Portfolio Manager Marc Steinberg that praised both Agrawal’s appointment and the appointment of Salesforce (CRM) President and Chief Operating Officer Bret Taylor as the new board chairman.

"I've decided to leave Twitter because I believe the company is ready to move on from its founders," Dorsey says. "My trust in Parag as Twitter's CEO is deep. His work over the past 10 years has been transformational. I'm deeply grateful for his skill, heart, and soul. It's his time to lead."

In fact, Twitter (TWTR) has been broadly underperforming the Nasdaq since the beginning of this year, while over the last 3 months this discrepancy has accelerated. Over this period Nasdaq rose roughly by 15%, while Twitter lost somewhere around 20% of its share price. Dorsey might feel uncomfortable about the increasing censorship pressure and other judgmental actions required from the company to comply with the complex reality of the modern world. On the other hand, Dorsey sounds genuine in his crypto and decentralization world aspirations. In the medium and long run, his decision to leave Twitter can be very beneficial for Square, whose stock needs a special focus in order to beef up the post-pandemic valuations. Square had been constantly beating analysts' estimates since at least Q4 2019 until recently, but last quarter earnings disappointed by showing a negative surprise of 2.63%.