Twitter CEO Jack Dorsey steps down, CTO Parag Agrawal tapped to replace him

Twitter experiences a leadership change as Parag Agrawal replaces Jack Dorsey as CEO. Yahoo Finance's Ines Ferre explains the decision and how stocks are reacting.

Video transcript

[MUSIC PLAYING]

- Welcome back. Twitter naming Parag Aregawi to succeed Jack Dorsey. Jack Dorsey is out as a top dog at Twitter. He is remaining at Square, but we want to talk about it with Yahoo Finance's Ines Ferré. And in this, we got a pop of about 10% on the stock. I'm going to pull it up on the YFi Interactive. It is now sinking into the red, down about 1 and 1/4% right now.

INES FERRE: Yeah, that's right. And this morning-- during this morning session, the stock had been halted for news pending, of course. That was the official word from Twitter that Jack Dorsey is stepping down as CEO. So starting today, the new CEO is Parag Aregawi. He's the CTO of Twitter and Dorsey will serve on the board up until his term is over around May. Dorsey tweeted out a letter that he had sent to his employees explaining why he was leaving the company. So he'll be on the board until about May to help Parag and then after that, he will leave the board.

Now, Dorsey is the co-founder of Twitter. Twitter went public back in 2013. Last year, the company had received some pressure from activist investor Elliott Management to-- sort of questioning the leadership of Twitter, but still Dorsey was kept in his place. And Dorsey said that this decision was his and that he owns this decision. This was his decision to step down. He's also the founder of also Square and he's a CEO of Square

And as you mentioned, the company saying that he will stay on as CEO of Square. But nevertheless, the stock bounced quite a bit around today as it had opened higher. And now, we're seeing trading a bit lower.

- Yeah, it's interesting to see--

- Yes, and we know you'll be on top-- sorry, [INAUDIBLE]

- I was going to say it's interesting to see how shares of Square are moving relatively flat compared to Twitter here. But you mentioned-- and as the concerns, at least from Elliott Management, but others investors, who not just last year, by the way, but for years have been raising questions about Jack Dorsey's ability to run two companies at the same time. What more do we know about Parag Aregawi, his role within Twitter and where he's likely to take the company?

INES FERRE: Yeah, certainly. So he is CTO of the company. And Jack Dorsey has said that he has been his pick for some time now. So it seems like Dorsey certainly had endorsed for him to be his successor and that he had some say in Parag Aregawi becoming the next CEO of the company.

But Dorsey in his letter also to his employees basically saying that there is sometimes a push founder-led company to continue to be founder, like he said [INAUDIBLE] he's trying to kind of get away from that idea of the founders still leading these companies. So it was, again, his decision and he's fully-- it looks like he had quite a bit of say in Parag becoming the next CEO.

- And we thank you for that report. Yahoo Finance's Ines Ferré.