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The Bright Side of Twitter’s Executive Departures

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Twitter’s video engineer is leaving

Twitter (TWTR) has been hit by a string of executive departures since Jack Dorsey returned in 2015 to lead the company as CEO. Dorsey is also the CEO of PayPal (PYPL) competitor Square (SQ).

Among the executives leaving Twitter recently are vice president of finance Celia Poon and vice president of live video engineering Jeremy Rishel. The technology website Recode reported that Rishel left on June 16 while Poon is scheduled to leave in August.

Earlier, Twitter had seen the departures of executives such as Adam Bain, who was its chief operations officer, Adam Messinger, who was its chief technology officer, and Josh McFarland, who was vice president of product.

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Red flags

Wall Street is usually alarmed by the exit high-level executives. In a December note cited by the USA Today, Mizuho Securities analyst Neil Doshi said, “We view C-Level changes as red flags for any business, and two unexpected C-level changes in a short period of time could, in our opinion, create significant investment risks.”

SunTrust Robinson Humphrey analyst Rodney Hull echoed the sentiment, adding that “this level of turnover can be disruptive to morale and product execution” in reaction to the talent drain at Twitter.

Room to bring in better talents

But executive outflow from Twitter has a silver lining. The departures create room for the company to bring in talents that align with its strategic plan. For example, Twitter in May announced the hiring of Bruce Falck to lead its advertising products. In the same month, it announced the hiring of former Bloomberg executive Todd Swidler to oversee its live video partnerships. Biz Stone, a Twitter co-founder, also recently returned to the company.

Despite recent executive departures, Twitter delivered a pleasant surprise in 1Q17 by adding 7.0 million more new subscribers than expected.

To drive future growth, Twitter is trying to keep up the pace with rivals Facebook (FB), Alphabet’s (GOOGL) Google, and Snap (SNAP) in digital video investments.

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