Dick Costolo Twitter CEO Stepping Down
On Thursday it was announced that as of the 1st of July, Dick Costolo, the chief executive of Twitter (TWTR, -0.03%), is stepping down. This comes at a time when the social media company is being viewed by analysts and investors as a company that has not been able to implement a growth strategy effectively. To put it in perspective, in Twitter’s IPO, the share price was $26 and when Costolo resigned, the share price was at $36. This represents a gain of only 38 percent. In comparison, for example, over the same period, investors of Barnes & Noble have seen a 76% increase while Macy’s (M, +0.55%) has advanced 53 percent. Meanwhile, Jack Dorsey, Twitter’s Chairman and co-founder, will take over as interim chief executive. The company’s search team, which consists of board members Peter Fenton, Evan Williams and Peter Currie, is now looking for a permanent replacement CEO and they are considering both candidates from outside the company as well as from within. In his statement, Costolo thanked the company and staff and while his resignation might have come as a surprise, it was inevitable. Investors have been putting a lot of pressure on the company as a result of disappointing growth as well as a series of executive changes. Meanwhile, Costolo has worked hard to try and direct Twitter in the right direction, trying to get investors to focus rather on the size of reach that Twitter has. The problem however is that while users see the content on Twitter, they do not use the service and as a result, while the company has 302 million monthly active users who sign in, this user based has only grown 18 percent over the last year. Today, Twitter has one fifth of the users who log into Facebook Inc. (FB, -0.40%). In afterhours trading yesterday, Twitter shares rallied sharply to trade at $38.45, up 7.3%.
In U.S. trading on Thursday, U.S. stocks closed higher. This came in response to positive retail sales data which provided confidence to investors regarding a strengthening economy. Despite these gains, the main indices finished off their session highs and pulled back as a result of a halt in negotiations between Greece and the IMF (International Monetary Fund). At the close of trading, the Dow Jones Industrial Average (DJIA) gained 0.2% or 38.97 points, to 18,039.37. Also on the upside was the Nasdaq Composite index (COMP) which rose 0.1%, or 5.82 points, 5,082.51. For the week, the blue chip Dow index could gain 1.1% while the Nasdaq is in line for a 0.3 percent increase. Meanwhile, the S&P 500 index (SPX) advanced 0.2%, or 3.66 points, to finish at 2,108.86. This index is on pace to end the week up 0.8%.
In forex trading on Thursday, the U.S. dollar (USD) traded steady. This came after data showed that jobless claims in the U.S. rose slightly while retail sales in the country in May increased more than expected. According to the Department of Labor, the number of people filing for initial jobless benefits in the week ending on the 6th of June increased from the previous week’s total of 277,000 to 279,000, up 2,000. Also, the Commerce Department reported that retail sales in May increased by 1.2%. This beat expectations for a gain of 1.1%. The EUR/USD traded at 1.1225, down 0.87% while the USD/JPY traded at 123.64, up 0.83%. Also, the GBP/USD traded at 1.5484, down 0.28% while the AUD/USD was also down 0.20% and trading at 0.7723. The U.S. dollar index was at 95.29, up 0.74%.
On Friday, crude oil prices declined in early Asian trade. Investors have now turned their attention to the expected report by Baker Hughes (NYSE:BHI), an oil services firm, regarding the weekly rig count as this will provide further indications on supply levels in the U.S. Last week, Baker Hughes reported that the oil rigs fell by 4 to 642, marking the 26th consecutive week of weekly declines. WTI crude oil for July delivery traded at $60.59 a barrel, down 0.30% on the NYMEX. Meanwhile on Thursday, Brent crude oil for July delivery traded at $65.11 a barrel, down 0.90% or $0.59, on the Intercontinental Exchange (ICE) in London.