Twitter (TWTR) Could Announce New CEO as Early as Next Week, SunTrust's Peck Says

Twitter (NYSE: TWTR), desperately in need of a new CEO, could announce a decision as early as next week, in the view of SunTrust Robinson Humphrey's Robert Peck.

"While we have previously written that we thought a permanent CEO decision would occur right after Labor Day, we now think that the decision is more imminent," he said.

Peck believes Twitter will announce a Triumvirate of leadership, with: Jack Dorsey as CEO, Adam Bain as COO / President, and Ev Williams with more board influence (perhaps Chairman).

"At this time, we still expect Jack Dorsey to remain as CEO of Square as well," he commented. "It is unclear how institutional investors will react to a permanent CEO who is also the CEO of a pre-IPO company. However, given the complexity of Twitter's turnaround and product road map, this Triumvirate structure may be the best solution. Further, more involvement by Mr. Williams may stem his large share sales. We also acknowledge recent executive purchases of stocks, including the CEO and CFO. As a replacement for Bain's current role, we have heard strong accolades for Richard Alfonsi (a former Googler and VP of Global Online Sales at Twitter since 2012."

Peck believes a board shakeup at the company is next. "Once the company has announced the new management structure, we think that a board shakeup is likely," he said. "The board is comprised of 8 members, 4 of which we think are likely to change, including: Peter Currie (VC), Peter Fenton (VC), Dick Costolo (former CEO), Marjorie Scardino (former CEO of Pearson and the Economist). Other directors that we think are likely to remain are: David Rosenblatt (1st Dibs CEO), Peter Chernin (former President of News Corp.), Jack Dorsey and Ev Williams (co-founder & former CEO). We would look for the company to put more expertise on the board in media, technology, and operations. We think active involvement by these directors is critical to shaping Twitter's future."

The analyst reiterated his Neutral and $38 price target on Twitter, saying fundamentals remain key. "While we think that a solidifying of the management team would be a great first step, and a board shakeup a great second step, a turnaround in the fundamentals (users, engagement, ad effectiveness) will be most critical to Twitter's long term future," he commented. "We remain cautiously optimistic on the LT oppty for the company (logged out users, the Google search deal, Lightening, Periscope, Vine, etc) once the dust settles. Execution against the opportunity will be paramount."

For an analyst ratings summary and ratings history on Twitter, Inc. click here. For more ratings news on Twitter, Inc. click here.

Shares of Twitter, Inc. closed at $28.54 yesterday.

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