Twitter’s prodigal son has returned after six years, and shareholders are sitting up and taking notice.
According to multiple reports, shares of the social media company were boosted by the return of co-founder Biz Stone. Following the announcement, midday trading saw stocks climb by 2% before closing at 1.35% to $19.49 in New York. Company shares have surged by 21% in the past three months.
Twitter shares now sharply up 2% after co-founder Biz Stone says he’s returning to the social networking company. https://t.co/hDBkncM2Ce pic.twitter.com/txv9PlNtwM
— CNBC (@CNBC) May 16, 2017
The rebound was a welcome development for Twitter, which took a blow last year after the exodus of its top executives, retrenchment of 9% of its total workers, and a stock plunge. The company hit rock bottom when acquisition talks with Salesforce collapsed.
Apparently, Stone accepted the invitation of Jack Dorsey, another co-founder who returned to the front office two years ago, to usher the company into the future amid the threat posed by growing competition.
In a blog post, Stone revealed that he’s not looking to replace anybody in the company. Instead, he will be resuming the role that he played before he left Twitter in 2011.
“My top focus will be to guide the company culture, that energy, that feeling,” he said. “It’s important that everyone understands the whole story of Twitter and each of our roles in that story. I’ll shape the experience internally so it’s also felt outside the company.”
I just published “What’s Happening with Me” https://t.co/GVXdpO8VYd
— Biz Stone (@biz) May 16, 2017
But a bump in Twitter’s market value after Stone’s return doesn’t necessarily mean a bright future ahead for the company. In fact, there are a few reasons why the Jelly founder probably won’t make much of a difference.
Aside from his ambiguous role in the company, which can still change in the future, things were really not that great when he was there. The issue with Twitter has always been its continued struggle with user growth. Only 60% of its 100 million monthly active users actually post a tweet.
The fact that Stone’s baby, Jelly, folded up and sold to Pinterest in just three years also does not provide much inspiration.
Finally, it’s unclear how Stone will be able to reverse Twitter’s fortunes, particularly when the company hasn’t significantly increased its social media footprint in recent years, unlike Facebook, Instagram, or even Snapchat, for instance.
Nevertheless, Stone is confident about Twitter’s future. As he wrote in his Medium blog, “Twitter has woven itself into the fabric of our global society. The world needs Twitter, and it’s here to stay.”