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Why the vulture fund that was Argentina's nightmare wants to remove Twitter director Jack Dorsey from office


Jack Dorsey announced that he is going to live in Africa for a few months this year, arousing the annoyance of shareholders

A rebellion is hatched on Twitter.

The investment fund

Elliott Management Corporation

 He is moving the waters within Twitter to replace the company's CEO and co-founder Jack Dorsey, according to US media.

This is the same "vulture fund" that won the trial against Argentina after the default in 2002 and that seized the frigate Libertad in 2012.

Its founder, the republican

Paul Singer

, who rejected the proposal to restructure the debt, got the Argentine State to pay him $ 1.3 billion for bonds that he bought for $ 40 million during the economic crisis.

Accused as a speculator by the government of Cristina Kirchner and one of the causes of the country being without access to the capital market for 12 years, the Elliot fund – which bought shares on Twitter – will seek the exit of Dorsey to increase the price of shares of the social network, valued at US $ 26,000 million.


Cristina Kirchner accused the Elliot fund of speculating with Argentina

Cristina Kirchner accused the Elliot fund of speculating with Argentina

And we are the only ones who have sought to dethrone the eccentric co-founder, known to wake up at five in the morning,

take cold water baths

, meditate, eat only once a day, fast for much of the weekend and walk eight kilometers a day to get to his office.

In December Scott Galloway, a Twitter investor and professor at the New York University School of Business, wrote an open letter expressing concern about the issue.

"To be clear, my main goal is to replace CEO Jack Dorsey," the statement says.

The secrecy of the operation


Paul Singer, founder of Elliott Management, is known for influencing the direction of the companies where he invests.

Paul Singer, founder of Elliott Management, is known for influencing the direction of the companies where he invests.

Although very little information has been revealed about the discussions that exist at the directory level, little by little some details have begun to emerge.

"All we know is that Elliott (Management Corporation) met Twitter, apparently with a handful of board members, and nominated four people to fill three vacant board positions," managing director Michael Pachter tells BBC World of Capital Analysis at Wedbush, a US investment and financial services firm.

Since Dorsey returned to Twitter as CEO in 2015, the company's shares have dropped 6%, while Facebook shares have risen more than 121% in the same period.

That lack of return for shareholders would be one of the causes behind the discontent.

But it would also be influencing the fact that Dorsey does not work exclusively for the firm, since he is also in charge of the

digital payment company Square

, another of his businesses.

"It is reasonable for shareholders to expect a CEO to spend all of his work time with the company," says Pachter.

"They want a full-time CEO and they want other changes, like increased revenue and earnings, but we don't have any more details."

Some industry analysts have criticized Twitter for "falling behind on innovation, choosing to focus on its central service, while other competing social networks, such as Snap or Instagram, develop

filters and popular stories

 among its users, "notes an article by Bloomberg.

Corporate power


Twitter is valued at nearly $ 26 billion

Twitter is valued at nearly $ 26 billion

The Elliott Management investment fund is known in the business world as an "activist fund".

This is what investors are called to use their power to influence the control of a firm, actively promoting – and directly – changes in management or corporate decisions.

In this sense, Elliott Management has had a policy of persuasion towards the directors of the companies in which it participates to implement radical transformations focused on increasing the value of the shares.

He recently bought shares in the Japanese giant SoftBank and announced that he planned to push for modifications in the Vision Fund company.

The fund has also promoted its business vision in other companies where it has interests such as AT&T and EBay.

"Elliott has a history of activism. He has held extensive positions at other companies in the past and has called for changes," says Pachter.

The founder of Elliot Management is Paul Singer, a billionaire with a fondness for the Republican Party, who has made many donations to this community.

The New York-based firm has more than $ 40 billion in assets under management and has interests in large companies globally.

Some analysts have argued that perhaps one of Paul Singer's motivations is to reverse Jack Dorsey's decision to remove the political ads from the platform.

Contacted by BBC Mundo, Elliott Management and Twitter declined to comment on the matter.

Dorsey's controversial trip to Africa


Dorsey has not publicly raised the issue.

Dorsey has not publicly raised the issue.

The first time Dorsey was removed from his post in 2008, council members expressed dissatisfaction with an alleged tendency to leave the job.

to go to yoga or fashion design classes

.

Recently, the businessman announced on Twitter that he is going to live in Africa for a period of three to six months in 2020, a news that probably did not leave investors of the firm very happy.

In 2018, Dorsey had already been criticized for going 10 days to a silent meditation retreat in Myanmar.

Back then, he said he was away from "devices, reading, writing, physical exercise, music, intoxicants, meat, conversation, or even eye contact."

The conflict of power within Twitter occurs precisely at a key moment for social networks, with the presidential elections in the United States and other unexpected circumstances such as the coronavirus outbreak, which usually attract more users and advertising investment.

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