Twitter Stock Rallies on CEO Resignation Rumor

Twitter Stock Rallies on CEO Resignation Rumor

Twitter shares closed up almost four percent yesterday after rumours began to circulate that Dick Costolo, the company’s chief executive, might be stepping down.

This was followed by a statement from a leading analyst that there’s a “good chance” Costolo won’t be leading Twitter’s charge for much longer.

While speaking to CNBC yesterday, Sun Trust analyst Robert Peck said that Costolo’s future with the company is in doubt.

“We think there’s a good chance he’s not there within a year,” said Peck.

While Peck didn’t cite any sources or provide any further information, the market liked what it heard – Twitter shares rallied by as much as 4.69 percent before easing slightly at the close.

So, even if this turns out to be nothing more than hot air, the fact that the market took to the news so positively must be worrying for Costolo, who’s had a difficult 12 months.

Earlier this month the CEO’s family trust sold the last of their Twitter stock in a move that was received poorly by some investors.

Bottom line: if Twitter’s upcoming Q4 earnings report (due February 3rd) doesn’t over-deliver, 2015 might well be Costolo’s last year with the company. Indeed, it might even be his last quarter.

Publish date: December 23, 2014 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT