Analyst: It Will Be 'Difficult' For Twitter To Replace Anthony Noto

Twitter's Chief Operating Officer Anthony Noto, perhaps the most visible Twitter Inc TWTR executive aside from CEO Jack Dorsey, could leave the social media to accept the CEO job at Social Finance Inc., according to a recent report from The Wall Street Journal. That's not great news for the social media company.

The Analyst

Evercore ISI's Anthony DiClemente maintains an In Line rating on Twitter's stock with an unchanged $21 price target.

The Thesis

Noto joined Twitter in 2014 and assumed the COO title in late 2016, which makes him a bit of a standout within Twitter's management team which has been "reshuffled" over the past two years, DiClemente said. As such, he has not only acted as a "constant presence" but a "reassuring force" for investors during a time of volatility. In fact, many investors see Noto as "one of their own" given his prior experience as an Internet-focused research analyst and banker, DiClemente said. This implies that any potential replacement to Noto won't be given a similar level of confidence.

Noto is considered to have played a vital role in Twitter's focus on live streaming sports events and is among one of the best executives for the job given his other prior experience as CFO of the National Football League, the analyst said. Without Noto playing a vital role in sports, there is a possibility "continued execution of a sports content strategy could grow more challenging."

It's not yet clear if Noto plans on even leaving Twitter in the first place and one of the options available at Twitter's disposal is for Dorsy to step down and give him the CEO title.

Price Action

Shares of Twitter were trading lower by 1.3 percent at $23.43 early Monday afternoon. Shares are up about 30 percent over the last three months.

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