Just days after rumors surfaced that Twitter (NYSE:TWTR) COO Anthony Noto was considering leaving the company after being offered the CEO spot at finance start-up SoFi, Noto is officially jumping ship. The start-up's previous CEO stepped down in September amid a sexual harassment scandal.
Noto will become SoFi's CEO effective March 1.
I'm really sad to see @anthonynoto leave us, but I'm happy for him and really proud of everything he's accomplished at Twitter. He's been a friend, partner, and mentor to me for years. He always has my support and gratitude. Thank you Anthony! We love you. https://t.co/wdI0rJqIck— jack (@jack) January 23, 2018
In no uncertain terms, this is a huge blow to Twitter. Considering the fact that Jack Dorsey continues to serve as CEO at his two different companies, Twitter and Square, Noto has long been seen as the company's most important full-time executive. You could even argue that Noto has been the one really running Twitter instead of Dorsey, particularly as Noto's responsibilities have only expanded over the years. It's telling that Noto fields most of the detailed analyst questions on earnings calls, while Dorsey tends to answer questions around strategy and products.
Noto left his job as a Goldman Sachs banker and joined Twitter as CFO in 2014. When COO Adam Bain left abruptly in 2016, Noto took on those responsibilities in addition to being CFO. Twitter found a permanent CFO in Ned Segal last year, freeing Noto to focus on operations and growing the live video business. Noto is also credited with helping land some of the recent big content deals.
Twitter has a poor track record with executive retention. If you look at just the COO position, Twitter has had three COOs in recent memory. Twitter named Ali Rowghani COO in 2012, less than a year before its 2013 IPO. Rowghani resigned in 2014 after an internal power struggle, with Bain taking the position in 2015 at the same time that Jack Dorsey returned as CEO. The CEO transitions over the years are a whole other story, one that is detailed extensively starting from Twitter's inception in Hatching Twitter.
The departure comes at a precarious time for Twitter. The company has made meaningful progress with right-sizing its cost structure in recent quarters, to the point where it even guided to GAAP profitability in the fourth quarter. Investors will find out if it succeeded when the company reports on Feb. 8.