Twitter loses key exec Anthony Noto, sparking concerns over turnaround
Twitter's chief operating officer Anthony Noto, whose Wall Street experience reassured investors about the trajectory of a social media company struggling in the shadows of Facebook, is leaving to become CEO of online lender Social Finance.
Noto's departure to Social Finance, known as SoFi, comes as Twitter's turnaround had begun to show hopeful signs, with shares buoyed by analyst upgrades and its October financial report.
It also deals another blow to a company whose executive team has been in flux — "no other C-level executive has been with the company for more than 2 years," Cowen analyst John Blackledge notes — and whose CEO Jack Dorsey splits his time between Twitter and Square, the digital payments company he founded.
Dorsey said Twitter had no plans to replace Noto, whose business operations and revenue-generating operations responsibilities would be assumed by other members of its leadership team.
"We see Noto as Twitter's second most important employee, after CEO Jack Dorsey," CFRA analyst Scott Kessler wrote in a research note late Monday after word of Noto's departure leaked. Kessler called Noto's departure "a significant loss."
Noto, 49, joined Twitter as its chief financial officer in 2014 from Goldman Sachs after helping take the company public. He took over as chief operating officer in 2016, playing a key role in developing products and in Twitter's push into live video streaming at a turbulent time for the company.
Twitter (TWTR) shares, which had risen nearly 14% over the last six months, fell as much as 3.9% to $22.41.
"The optics of the departure are not good for Twitter at a time when investors have become increasingly optimistic about a turnaround," Stifel analyst John Egbert wrote in a research note.
"Twitter’s ad business has been declining year over year for several quarters but is expected to return to growth in early 2018 according to Street forecasts," he said. "It’s fair to question whether an advertising business recovery seems less likely now that Mr. Noto, who was likely involved in negotiating larger advertising commitments, is departing the firm."
SoFi said Noto would become CEO on March 1.
"We are simply thrilled to have found someone of Anthony’s expertise and knowledge to lead SoFi," said interim CEO Tom Hutton, who also has been serving as its executive chairman.
Hutton, who will become non-executive chairman of SoFi's board, became interim CEO in September 2017 after then-Chairman and CEO Mike Cagney departed following a lawsuit that alleged sexual harassment by managers and improper loan paperwork at the company.
Before joining Twitter, Noto spent nearly four years as co-head of technology, media and telecommunications at Goldman Sachs. Noto also was the National Football League's chief finance officer for three years.
"Anthony has been an incredible advocate for Twitter and a trusted partner to me and our leadership team," said Twitter CEO Jack Dorsey in a statement.
In a statement, Noto said SoFi represented an "extraordinary opportunity."
"It has been an honor to work alongside Jack and contribute to the success of one of the most impactful platforms in the world," he said.
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