Twitter, Inc. (NYSE:TWTR) will keep Jack Dorsey as CEO in deal with activist investor group

Twitter, Inc. (NYSE:TWTR) will keep Jack Dorsey as CEO in deal with activist investor group

Twitter, Inc. (NYSE:TWTR) will keep Jack Dorsey as CEO in deal with activist investor group

Jack Dorsey will remain Twitter’s CEO as part of a deal the company reached with Elliott Management, an activist investor firm that, for the past two weeks, has been trying to push Dorsey out as part of an overhaul to Twitter’s business.

The deal sees Twitter committing to buy back $2 billion worth of stock. It’s also naming two new board members: one from Elliott Management and one from Silver Lake, an investment firm that’s putting $1 billion into Twitter to fund the buybacks.

Both new board members had positive things to say about working with Dorsey in a press release published today. The announcement indicates that Dorsey is sticking around for the time being, but it also suggests that the board will look into when it would be appropriate to move to a new CEO.

The new board members will be part of a committee evaluating “the CEO succession plan.” They’ll be joined by three additional board members, all of whom currently serve on the board. The group intends to share their findings publicly by the end of the year.

Elliott’s initial objections to Dorsey were vague. They seemingly had to do with Twitter perpetually being a bit of a mess, and Dorsey also running a fully separate second large company. But the investment firm had purchased a 4 percent stake in Twitter, giving it the leverage to make some noise and potentially cause problems for Dorsey.

Last year, Elliott ran almost this exact same playbook with AT&T. After buying a substantial stake in the telecom company, Elliott published a lengthy note trashing AT&T’s recent acquisitions and stock performance, and it called for major changes. In the end, AT&T agreed to a few goals and far less dramatic changes that appeased Elliott.

Technical Indicators

Overall, the bias in prices is: Downwards.

The projected upper bound is: 35.79.

The projected lower bound is: 29.13.

The projected closing price is: 32.46.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 39.9548. This is not an overbought or oversold reading. The last signal was a buy 5 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 40.62. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 20 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -114.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 5 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 9 period(s) ago.

Rex Takasugi – TD Profile

TWITTER INC closed down -1.000 at 32.460. Volume was 95% above average (neutral) and Bollinger Bands were 17% wider than normal.

Open     High      Low     Close     Volume___
31.810 35.360 30.670 32.460 7,302,153
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 34.37 34.33 36.25
Volatility: 69 60 54
Volume: 5,587,782 4,147,829 3,214,762

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

TWITTER INC is currently 10.5% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect volume flowing into and out of TWTR.N at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on TWTR.N and have had this outlook for the last 6 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.

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