Twitter COO Anthony Noto’s departure ignites concerns about turnaround

Twitter Chief Operating Officer Anthony Noto has resigned to become the chief executive officer of Social Finance, a departure that has some analysts and investors worried about the tech firm’s future.

Noto, whose departure was announced Tuesday, joined Twitter in 2014 before co-founder Jack Dorsey returned to lead the company.

Noto served as Twitter’s chief financial officer before becoming COO in 2016. At one point, he juggled both jobs as the company searched for a new CFO.

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“We view the announcement as an incremental negative for Twitter shares given Noto’s various roles and involvement at the company over the years,” wrote John Blackledge, an analyst for Cowen, in a note on Tuesday.

Noto is the only c-level executive who has been at the company for more than two years, Blackledge noted.

Twitter, which has struggled to attract ad dollars, has been slashing expenses in an effort to turn a profit. The company moved closer to that goal last year, but it continued to face a string of departures from key executives.

With Dorsey splitting his time as CEO between Twitter and mobile payment company Square, Noto played a big role in Twitter’s turnaround efforts.

In a statement Tuesday, Noto said he was proud of the team at Twitter and the milestones they achieved while he was there.

“While it’s bittersweet to depart, I have the utmost confidence in Twitter’s future and look forward to watching the wonderful success the team will continue to achieve,” he said.

But investors weren’t too happy about the news. The tech firm’s stock is down more than 2 percent at $22.81 per share Tuesday.

While Twitter has been making changes in an effort to combat online abuse and make the site easier to use, some analysts question if the company is doing enough to compete with larger tech firms such as Facebook and Google for ad dollars.

“While our industry checks had suggested that recent improvements to the timeline and content offering (e.g., video) have benefited Twitter, it is not clear whether these will translate into real market share gains,” wrote Colin Sebastian, an analyst with Baird  Equity Research.

Noto, who told Twitter he was resigning on Monday, is scheduled to start his new job as SoFi’s CEO in March. The startup started looking for a new chief executive after Mike Cagney left last year amid sexual harassment allegations.

Members of Twitter’s leadership team will take over Noto’s responsibilities as COO, the company said.

Twitter, which has 330 million monthly active users, is scheduled to report its fourth-quarter earnings on Feb. 8 before the market opens.

Photo: Anthony Noto, chief operating officer of Twitter, arrives for the third day of the annual Allen & Co. Sun Valley Conference on July 13, 2017 in Sun Valley, Idaho. Noto has resigned from Twitter to become CEO of Sofi. (Drew Angerer/Getty Images)

 

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