Twitter Inc. (TWTR) Chief Executive Jack Dorsey is facing calls to relinquish his role as CEO of the embattled social media network amid a bot scandal and a lack of robust user growth. (See also: Twitter May Have 45 Million Bots on Its Hands.)
Over the weekend, the U.K.’s Sunday Times reported that Dorsey is facing mounting pressure to step down as CEO after a study surfaced showing that at least 48 million user accounts are bots and not people. Earlier this month the University of Southern California and Indiana University issued a research report that showed as many as 15% of Twitter accounts are actually algorithms doing all that tweeting and retweeting. Given that Twitter has 319 million monthly active users, 15% comes to 48 million accounts not opened by humans.
The 15% figure is nearly double Twitter’s own estimate that as many as 8.5% of its user accounts are bots. That’s is particularly troublesome for Twitter since its already having a tough time with advertisers.
Dorsey Returned to Turn Company Around
Dorsey returned to the helm in 2015 with a charge to turn around the struggling social media network, and since then there’s been more bad news for Twitter. Take its fourth-quarter earnings, which the company reported earlier this year. Twitter reported adjusted earnings of 16 cents per share on revenue of $717 million, which beat Wall Street's expectations for earnings per share of 12 cents but missed revenue forecasts of $740.14 million, according to Thomson Reuters. Aside from missing on the top line, this amounts to less than 1% revenue growth, and even the beat on the bottom line translates to flat growth year over year (YOY).
Twitter's revenue was hurt by weak advertising sales, totaling just $638 million, marking a slight YOY decline. The poor earnings results and the bot scandal comes amid concerns by advertisers about the placements of ads on Twitter. According to the Times, the sister publication of the Sunday Times, a series of investigations have shown online advertisements for blue-chip companies are being placed alongside offensive or racist material including jihadi recruitment videos, according to the report. It’s not just Twitter’s reputation and user base that is hurting and resulting in calls for Dorsey to step down. The stock has been sinking and is down more than 19% since the beginning of February.
Investors in the U.K. aren’t the only ones that appear to be unhappy with Dorsey. Last week billionaire investor Chris Sacca, one of the social network’s earliest investors, said he "hates” Twitter’s stock and took issue with the fact that millions of Twitter’s accounts are bots. The investor hasn’t owned shares of Twitter for a couple of years, saying he “lost hope” after Twitter failed to bring back co-founder Evan Williams. “Love the service, hate the stock,” the host of ABC's "Shark Tank" tweeted in response to a question from a fan.