The invader came in quietly. By mid-February 2020, Twitter’s board heard rumors of big purchases of its shares, but the buyer’s identity was concealed by equity swaps—financial instruments that did not trigger SEC requirements for public stock disclosures. The value of the purchases crept up and up, from thousands to millions, until, by late February 2020, it hit $1 billion.
The buyer was Jesse Cohn, a top partner for Elliott Management, the $71 billion fund founded by Paul Singer that was known for shaking up—or destroying, depending on who you asked—corporate boardrooms around the world.
With his stake secured, Cohn texted Omid Kordestani, Twitter’s board chairman, and asked to talk. It was a phase shift in the secret campaign he had been waging for weeks to remove Dorsey once again from his perch atop Twitter. Kordestani, a suave Iranian American salesman who had led Google’s business development during its heady dot-com days, knew the second that Cohn’s name appeared on his phone that it couldn’t be good news. On the call, Cohn confirmed his fears. Elliott Management owned a 4 percent stake in Twitter.
Cohn was brief and blunt. He told Kordestani to expect a letter detailing the stake he had accumulated in Twitter and the demands that he planned to impose. It was irresponsible to let Dorsey run the business while he was distracted by his dual role at Square, Cohn argued.
On February 21, a few hours after his call with Kordestani, Cohn sent his promised letter to Twitter’s board, formally announcing his stake in the company. The letter stopped short of calling for Dorsey’s firing but outlined the concerns about his part-time leadership. The board panicked.
Twitter was unlike Facebook and Snapchat, where the founder–chief executives had structured their ownership specifically to protect themselves from this kind of interference. Those companies had super-voting shares that gave the founders outsize control over their organizations, even after the companies had gone public. Dorsey owned only a thin slice of Twitter, a 2 percent stake worth about $531 million, and had no super-voting stock, leaving him vulnerable.
Cohn had waited until the last minute to announce his position, just two days before Twitter’s February 23 deadline to nominate new board members. Twitter had a few open seats on its board that it had intended to fill with independent directors, expanding the breadth of knowledge and prestige in its boardroom. But the process of filling them had moved slowly. At one point, Dorsey had suggested adding Musk but had been rebuffed.
Cohn insisted that he be immediately placed on Twitter’s board along with three of his loyalists. There were only three open seats on the board, but Cohn wanted to ensure he would control them and have a backup plan to grab a fourth seat if any of the current directors stepped aside. The board seats would allow Cohn to quickly get inside the company and start flexing his muscles. The board huddled over the final week of February without Dorsey present, trying to figure out what to do.
Twitter’s stock price had fallen more than 20 percent in late 2019 after the company missed Wall Street expectations and revealed its ad service to be ridden with bugs and outages that prevented advertisers from properly targeting consumers. The numbers didn’t make Twitter look like a company operating at peak performance or Dorsey like a chief executive with his eye on the ball.
But people inside the company believed in Dorsey, and he had a loyal and close-knit team of executives, some of whom might follow Dorsey out the door if they thought he was forced to go.
Dorsey was livid about Elliott Management’s intrusion. He didn’t want to be thrust into the spotlight for a public litigation of his successes and shortcomings—not again after being fired once before and dealing with the fallout from the 2016 election. He loathed the idea of out-of-touch finance bros in windowpane-check button-downs meddling with engineering and his vision for the product, and he did not want to be the focal point of a drawn-out battle.
He threatened to quit rather than wait to be pushed out in an agonizing repeat of his previous firing. Dorsey’s message to the board was clear: “It’s him or me.” If Cohn was allowed to come in, he would storm out.
>>> On a gray Friday morning, Cohn’s jet touched down at San Francisco International Airport. As the wheels hit the tarmac, the corporate raider readied himself for a showdown. At thirty-nine, the Long Island native had already led several activist shareholder campaigns against companies like eBay and AT&T, and earned enough money for a $30 million Wall Street penthouse apartment.
Cohn homed in on underperformers, quietly buying up stock. Once he had some financial leverage, he would force out corporate leaders or seek concessions to improve the bottom line. As the target’s profits rose, so would the stock price. Then Cohn would sell, walking away richer, busted careers in his wake.
Cohn did not particularly care who replaced Dorsey as Twitter’s chief executive—anyone full time would be better, he believed. The company was languishing under its part-time leadership and Dorsey would never make Twitter his top priority, since the vast majority of his wealth came from his shares in his digital payments company, Square. Worst of all, the board had given Dorsey an unreasonably long leash, ignoring the problems his lack of focus caused, Cohn thought.
Two of those perhaps overly lenient board members were on their way to confront Cohn. Kordestani and Patrick Pichette, a graying venture capitalist who had once served as Google’s chief financial officer, shared a car that morning as they rode past the steely waters of the San Francisco Bay and plotted their counterattack. The pair were in agreement: Dorsey stays.
Cohn waited for them in a private conference room in the terminal that had been specially booked for the showdown. When the board members arrived, Cohn greeted them casually, despite the seriousness of the situation.
Pichette and Kordestani were put off, although they tried to stay poker-faced. Cohn’s coup could upend one of the most important social media companies in the world, a hub for political speech that was sure to play a key role in the upcoming U.S. presidential election. Was he taking any of it seriously?
The battle for Dorsey’s future could begin.
Cohn was quiet and polite, belying his reputation as a hard-driving CEO killer. He dressed casually, forgoing the Wall Street uniform of a suit and tie, and had brought only Marc Steinberg, an Elliott portfolio manager, not a bevy of lawyers.
Cohn invited Pichette and Kordestani to sit and talk. Despite his mellow approach, he was firm: Twitter’s stock was underperforming, and it was Dorsey’s inattention that was causing the pain. He needed either to leave Twitter or abandon Square. It was untenable for him to do both, Cohn believed.
Pichette leaned on his experience at Google as he made his case to Cohn. Sundar Pichai was technically the leader of only one company, Alphabet, he argued. But under the Alphabet umbrella was the search company Google, the video service YouTube, the corporate web suite Cloud, and moonshot projects like self-driving cars. Pichai ran it all without Wall Street worrying he was distracted.
Why not let Dorsey run just two companies, Twitter and Square? What mattered wasn’t the number of businesses but having the right teams installed around a visionary leader to make sure everything stayed on track. Cohn should meet Dorsey, Pichette insisted. Only then could he understand what made Dorsey so special.
Cohn thought Pichette and Kordestani seemed defensive, and he and Steinberg tried to soften them with their friendly, informal approach. They had brought stacks of documents to argue his point of view. Investors deserved more from Twitter, given its role in public discourse. To Cohn, it didn’t matter how many companies Pichai was theoretically capable of running—it just wasn’t good governance to have a chief executive who was constantly pulled in different directions. Just because a tipsy driver might get home safely didn’t mean that getting behind the wheel after a night at the bar was a good idea. Twitter needed a leader who was focused on fixing its performance problems and could dedicate all of his time to the company, Cohn said.
By the following weekend, February 29, word of Elliott’s intervention had leaked. Twitter employees immediately erupted in outrage at the idea that their quirky yet beloved chief executive might be ousted. Many of them credited Dorsey with creating Twitter’s unique culture that put people and speech over profit and speed. They tweeted support for Dorsey under the hashtag #WeBackJack, sharing stories about his leadership and praying he would stay.
Even some tech leaders stood up for Dorsey. “Just want to say that I support @Jack as Twitter CEO,” Elon Musk tweeted.
>>> Several Twitter employees came home from Houston after OneTeam feeling incredibly ill. Maybe the aches and chills were caused by the constant drinking and partying, but dozens of workers developed fevers and stayed away from their offices in the weeks following the event. They joked that they had the “OneVirus.”
By late January, news reports were circulating on Twitter of a mysterious virus spreading rapidly across China. First detected in Wuhan, the capital city of the country’s central Hubei province, the COVID-19 coronavirus recorded its first U.S. case near Seattle on January 20, 2020. Had they perhaps contracted something other than the flu at OneTeam? Twitter employees wondered.
Just as his employees rallied around him, Dorsey sent them away. On March 2, the company encouraged everyone to work from home. Twitter was one of the first major American corporations to do so—unsurprisingly, given that its chief executive already encouraged remote work. As Twitter workers scattered to their homes, they were told nothing about Elliott’s maneuver.
Dorsey still seethed. He was required to recuse himself from board discussions about potential changes, and resented being in the dark. From the outside, it seemed like no one on the board was standing up for him, and he became furious not just with Cohn but with his own board members.
Twitter’s bankers at Goldman Sachs, meanwhile, mounted their defense. The best Dorsey could hope for, they said, was to fight money with money. Dorsey needed a white knight investor to save him. Dorsey immediately suggested Laurene Powell Jobs, the widow of Apple’s founder Steve Jobs. The blond mogul managed her husband’s multibillion-dollar trust and was one of the few people with the financial firepower to come to Dorsey’s aid. Dorsey deeply admired her late husband, and knew that Laurene supported founders and was fond of him. She also tended to invest in media companies, climate projects, and other vehicles with a clear public benefit; Twitter fit comfortably into that niche.
Dorsey pushed the board to pitch Powell Jobs, and she met with its members to discuss a potential investment. But despite her wealth and friendship with Dorsey, she declined to back him in the fight against Elliott. The investment seemed wrong for her portfolio for several reasons, among them that a messy boardroom battle didn’t suit her polished image.
Agonizing over what to do, Dorsey received an unexpected phone call during the first week of March. On the other end of the line was Egon Durban, the cohead of Silver Lake, an investment firm that specialized in technology and entertainment. Unlike Cohn, Durban, a Texas native with a deep tan from his golfing and surfing excursions around the world, had a long history in Silicon Valley and understood what Dorsey wanted to achieve at Twitter. He had made a name for himself by brokering the sale of Skype to Microsoft for $8.5 billion in 2011. The Silver Lake leader may have agreed that Twitter wasn’t living up to its potential—he had considered taking Twitter private several years earlier—but he was a friendly face who had gotten to know Twitter when he probed the company for a potential acquisition.
Durban had read the news about Elliott Management and was calling with an offer. Cohn had come to Twitter with a $1 billion battering ram. To head him off, Durban would match him, funneling $1 billion into Twitter himself. The money would be enough to force a truce with Cohn, keeping Dorsey in place and buying him time to improve Twitter’s stock price. It would turn into a high-stakes game of tug-of-war, but Dorsey had few options. He accepted Durban’s offer.
Pichette continued to urge Cohn to meet with Dorsey himself. He flew to New York to make his case to Cohn in person, walking through an eerily empty airport as more and more travelers abandoned their plans amid fears of the virus. Twitter’s bankers at Goldman hosted the second meeting, and Pichette insisted that Cohn should see firsthand what Dorsey had to offer.
Cohn agreed, and Dorsey sullenly accepted the meeting, understanding he would need to charm the investor in order to keep his job. Cohn flew back to the West Coast and met Dorsey at Goldman Sachs’s office in Menlo Park on Sand Hill Road, the famed Silicon Valley corridor where the biggest venture capitalists set up shop to hear pitches from the most promising start-up founders.
While Pichette and Kordestani had insisted that Cohn would recognize Dorsey’s genius once he saw him in person, Cohn felt as though he already knew reclusive founders like Dorsey—young men who believed they were uniquely capable of changing the world and clogged Sand Hill Road as they traipsed to investor meetings. While the venture capitalists might be convinced that all it took to succeed was a laptop-toting visionary, Cohn was more old-school. Businesses needed structure and discipline, he thought.
Dorsey eyed Cohn suspiciously, trying to put on a friendly face. He spoke in his usual thoughtful cadence, trying to explain Twitter’s importance to Cohn. But the activist had come ready to poke the bear.
“How can you run both companies?” Cohn asked Dorsey.
Dorsey responded that he had a management process, explaining the way he relied on Agrawal, Beykpour, and Falck, the deputies who had recently joined him onstage at OneTeam, to make decisions in their areas of expertise. The same went for Square, Dorsey said—he had people he trusted running the show. When he needed to step in and make the final call, they knew where to find him.
Cohn didn’t like what he was hearing from Dorsey in the meeting. He worried that Dorsey surrounded himself with yes-men. Many of his trusted executives, including Agrawal, had spent most of their careers at Twitter and didn’t know how a normal business would be run. There was no replacement for face time with a chief executive, and Dorsey’s tweeps just weren’t getting enough.
At the end of the meeting, Durban headed over from Silver Lake’s office, just yards away from the Goldman suite. His sudden presence—and his promised investment in Twitter—took Cohn by surprise. The activist left with his worries about Dorsey reinforced. But his role was to improve Elliott’s investment, and a drawn-out fight with Silver Lake wouldn’t help.
Cohn set about making a deal that he could live with. Pichette and Kordestani shuffled between the parties, ironing out a truce. A frustrated Dorsey bemoaned Twitter’s lack of super-voting shares. Cohn insisted Twitter expand revenue and attract new users, and pressured the board to set up a new committee focused on governance, an attempt to tame the freewheeling company. With $1 billion apiece on the line, Cohn and Durban each had seats on Twitter’s board. Cohn dropped his demand for additional board seats and only took one for himself.
By the end of the week, Dorsey had been rescued. “We are deeply proud of our accomplishments and confident we are on the right path with Jack’s leadership and the executive team,” Pichette said in a March 9 statement announcing the truce. “While our CEO structure is unique, so is Jack and so is this company.”
There was also some reshuffling. It was clear to Cohn that the arrangement with Kordestani let Dorsey run amok. Pichette, an owly Canadian who favored Patagonia pullovers, had more management experience and an ease about him that made him a better candidate to rein in Dorsey. He was swapped in as chairman.
Pichette also snagged the job of running the governance committee Cohn had demanded. His first task, according to the deal Cohn struck with Silver Lake and Twitter, was to evaluate the effectiveness of Dorsey’s leadership, “given that the Company’s chief executive officer has another chief executive officer role.”
The agreement brokered with Elliott was clear—the investment firms could meddle in corporate governance and try to tether Dorsey to his desk, but they would keep their noses out of product and policy decisions. The arrangement would give Dorsey some leeway to pursue his lofty goals.
>>> On March 19, little more than a week after the truce with Elliott, California issued its first stay-at-home order, banning residents from leaving their homes except for essential tasks. As the pandemic began to rage, Twitter’s headquarters, an Art Deco high-rise on San Francisco’s Market Street, lay empty.
Dorsey initially retreated to his mansions in San Francisco’s Sea Cliff neighborhood and in Big Sur. But he soon hit the road, traveling to Hawaii, Costa Rica, and French Polynesia. His direct reports complained that they could sometimes hear roosters crowing in the background of his conference calls, a reminder that he was on an island, while they were trapped in their apartments. In May, Twitter became the first tech company to announce that its employees would work remotely, forever—a decision driven by Dorsey’s desire to stay away from the office.
By the summer, he stopped chiming in during meetings entirely. He routinely kept his camera and microphone off, leaving employees wondering if he was still sitting near his laptop at all or if he had wandered off to surf.
As Dorsey faded away, Cohn and the other directors discussed a plan for Twitter to double its revenue by 2023 and increase its daily audience by at least 64 percent, to 315 million people. Cohn pushed for even higher targets, but Twitter executives resisted his demands, fearing that they were unrealistic. If they committed to goals that were too lofty, the stock would certainly spike and give Cohn an opportunity to sell his shares for a win. But the Twitter team would be left holding the bag.
In late October and early November, a gaunt-looking Dorsey videoconferenced into Congress to testify several times about content moderation. Hidden behind a scraggly gray-and-white beard that descended past his chest, Dorsey responded patiently to the senators’ questions about decisions the company had made to delete certain tweets and allow others to remain on the platform. He walked them through his nascent plans for decentralizing social media—inspired by the technology behind Bitcoin, he believed social media could run on public code governed by regular people rather than corporations. Dorsey told the senators he wanted to give users more control, empowering them to choose their own algorithms that would govern the kinds of content they saw and excusing Twitter from its moderation responsibilities. This was the path forward that all social media companies would eventually follow, he insisted.
Although Dorsey took pains to set up his laptop with just a simple white wall as his backdrop, some of his employees who had been on conference calls with him recently recognized the location—Dorsey was dialing in from a rental property in Hawaii.
Despite Elliott’s insistence that Twitter could not survive with a part-time CEO, Dorsey was freer than ever. Not even a public hearing in front of Congress could confine him to a particular home or desk. A few days after his November testimony, paparazzi captured him strolling on a secluded Hawaiian beach with Sean Penn and Jay-Z.