In a down market, Twitter rose 3.5 percent in regular trading, and is up a fraction after-hours. The major indexes slipped more than 0.6 percent apiece.
Given the general dearth of news surrounding Twitter at the moment, it is not overly bold to ascribe at least a portion of its momentum today to the departure of Rowghani. User growth under his tenure has been infamously slack, causing Twitter to dip steeply following both of its public earnings reports to date.
Rowghani also sold stock in Twitter when the recent unlock period expired. Other C-level executives pledged not to. The move was embarrassing for the company, even though the 300,000-share sale itself was too small to damage Twitter’s price. Rowghani also recently exercised 74,600 options and sold those shares, as well.
The COO’s exit by itself won’t stoke Twitter’s growth engine, but it could create internal room for a different direction that could bolster the company’s monthly active user count. Investors appear at least optimistic that a reformed leadership structure could help the company.
Why does user growth matter for Twitter, when it is performing strongly from a financial perspective? If Twitter can’t grow its user base in the short term, its ability to make more money down the road could be impaired.
The company closed the day at $36.79 per share, up sharply from its 52-week low of $29.51, and sharply down from its 52-week high of $74.73.
Twitter did not reply to a request for comment.