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Dorsey: I have no problems running both Square and Twitter

When asked, Dorsey did not shoot down the possibility of combining the two companies

Financial trends and news by Steven Loeb
October 26, 2016 | Comments
Short URL: http://vator.tv/n/47dc

It's been over a year now since Jack Dorsey officially returned to Twitter as CEO, after a few months in interim capacity. 

Dorsey is, of course, also CEO of Square, and when questioned about his ability to run two companies, one of which was public, and the other about to go public, at the same time, this was his answer:

"My ability to manage both Twitter and Square is made possible by the great teams at both companies. Having been in this position of having run both companies for the last three months, I can say from daily experience that both have world class leaders dedicated to each company's mission."

A year later, with both companies now struggling, and with their stock prices down, it's a fair question to ask: did Dorsey overextend himself by taking on roles at the same time?

On a panel at Money 20/20 in Las Vegas this week Dorsey was asked that very question by Kayla Tausche, of CNBC Business News.

"Is it hard to to take off your in-depth payments hat, and put on your social media hat, when you have to? Is it easy to toggle between the two topics?" she asked.

"Selling goods and services is foundational, and I think it's as foundational as communication," he responded. "I don't really consider it a shift. I want to work on things that people interact with every single day, and that empower them in particular ways, and finance and commerce is one such, communication is another. It's not a big context shift."

Dorsey is hardly the first person to take charge of two companies at once. Steve Jobs did it with Pixar and then Apple. The most notable current example is Elon Musk, with Tesla and SpaceX. Earlier this year, Musk decided to combine Tesla with SolarCity, another company he helped start, and which he serves as chairman.

That begs the question of whether or not Dorsey might consider doing the same, but he demured when asked.

"The companies have worked together. We have had partnerships," is all he would say, not closing the door on the prospect. 

The state of Square and Twitter

It's fair to say that both Square and Twitter have had rocky years, though Twitter has received much more coverage, and much worse press.

Square went public in November 2015, around month and a half after Dorsey took the Twitter job full time. It priced at $9 and closed at 45 percent above its IPO price.

However, the company's valuation dropped 30 percent in IPO pricing; it had been valued at $6 billion, but that dropped to $4.7 billion. That led it to be ranked as the worst IPO of the year by Pitchbook. 

The stock ended trading on Tuesday at $11.07 a share. It is down 15.43 percent year-to-date, though still up 23 percent from its IPO price.

Square's struggled have remained, for the most part, under the radar. Twitter, on the other hand, has been getting dragged over the coals recently, after rumors of its sale petered out.

Earlier this month, reports began to surface that numerous companies were expressing interest in acquiring the company, including Disney, Google and Salesforce. As a result Twitter made major gains in its stock price, closing at its highest level in 10 months.

As soon as those bidders started to drop out, though, all those gains were lost. In just  two weeks, it lost nearly 31 percent of its value, dropping from $24.87 a share on October 5, to $17.07 on October 19.

There are now rumors that the company is going to be laying off 8 percent of its staff, or 300 people, the second such cut since Dorsey took over. 

Obviously the problems that Twitter is facing were there before Dorsey came back, and he has tried very hard to fix them. Perhaps it was just too much to ask to keep is on the ball of two companies, both of which probably need his full attention.


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