The move by Jack Dorsey to step down from his CEO role at Twitter could be good news for the social media stock as well as Square , where he also holds the top role, according to Bank of America. Dorsey announced on Monday that he was stepping down at Twitter, effective immediately, and is being replaced by chief technology officer Parag Agrawal . Dorsey has been serving as the CEO of both Twitter and Square for several years, leading to concerns from investors in both companies that he was not focused enough. The two stocks had muted reactions to the announcement, but both could benefit long-term, according to Bank of America. Analyst Justin Post reiterated Twitter as a buy rating, saying in a note to clients Monday evening that the handoff to Agrawal should be a success. "There have been ongoing concerns on Mr. Dorsey's dual-CEO roles that may have deterred some investors from owning Twitter, and in 2020, Elliott Management founder, Paul Singer, publicly expressed concerns on the issue ... It will likely take time for Mr. [Agrawal] to gain confidence from investors, but as a member of the tech team and then as CTO he has contributed to increased product velocity over the past 3 years," Post wrote. Meanwhile, analyst Jason Kupferberg upgraded Square to neutral from underperform, saying that the recent slide for the stock and Dorsey's full attention to the company made it more attractive. "We are also incrementally encouraged by yesterday's announcement that Jack Dorsey is stepping down as CEO of TWTR, meaning he can devote all of his time to being CEO at SQ, which we view as good timing with the Afterpay integration looming," the note said. Bank of America has a price target of $79 per share on Twitter, which is more than 70% above where the stock closed Monday. Meanwhile, the firm hiked its price target on Square to $221 from $210, implying upside of just under 4%. -CNBC's Michael Bloom contributed to this report.
Jack Dorsey, co-founder and chief executive officer of Twitter Inc. and Square Inc., speaks during the Bitcoin 2021 conference in Miami, Florida, on Friday, June 4, 2021.
Eva Marie Uzcategui | Bloomberg | Getty Images
The move by Jack Dorsey to step down from his CEO role at Twitter could be good news for the social media stock as well as Square, where he also holds the top role, according to Bank of America.
