On May 22nd, Twitter shareholders will vote to decide whether to launch a radical proposal: make it a cooperative
On May 22nd, Twitter shareholders will vote to decide whether to launch a radical proposal, or to make the social network a cooperative owned by its users. the company's annual meeting is scheduled for next month and one of the items on the agenda will be the request to become a cooperative.
Through this proposal, which will be voted by the shareholders – the company will be asked to "prepare a report on the nature and feasibility of selling the platform to its users, through a cooperative or similar structure. Twitter is opposed to this plan and it seems unlikely to win such a proposal. But it is still an interesting action that underlines the discontent of some shareholders who perceive the difficulties of the social which struggles to grow and to get profit. The idea that led to the imminent vote is based on a petition signed by at least 3,500 people. The petition goes against the global reach of the social network and the gloomy predictions about its financial performance, arguing that its conventional structure corresponds to its social value, an aspect that is not adequately appreciated.
The petition reads:
For many of us, Twitter is the fastest and easiest way to learn about and share what is happening around us, offers conversations, spreads information and stimulates new movements. But Wall Street thinks the company is a failure because it is not raking in sufficient profits for shareholders. This means that Twitter for sale and there is a real risk that a new owner could ruin our beloved platform, in pursuit of profit or political advantages. A cooperative structure could bring results in terms of new income streams, as users could become co-owners. Without short-term pressures from stock markets, we will be able to realize the potential value of Twitter, something that the current Twitter business model has struggled to achieve for years now. We could set more responsible and transparent rules for managing abuses and violations and we could re-open the platform's data to stimulate innovation. Everything would be invested in the success and sustainability of Twitter. A conversion like this would lead to objective returns for current investors.
The other examples
The proposal for Twitter mentions a series of examples of cooperatives as proof of how the new course of the company could work: "Successful companies such as the Green Bay Packers, REI and the Associated Press owe their popularity, their capacity to recover and their profitability to the owners' structure. Some examples of successful online companies include startups such as Managed by Q, which assigns office cleaners and Stocksys Unite, a stock photo platform owned by its photographers.
What Jack Dorsey thinks
The Twitter administration, obviously, does not support this proposal. In a statement, the company said that: "The proposal does not meet the interests of Twitter and those of our shareholders. We believe that the preparation of a report on the nature and the possibility of selling the platform to the users involves a bad allocation of resources and a distraction for our board of directors from the management of resources and times, which instead could be used to build value long-term Twitter. The proposal aims at the screening of the sale of the "platform" to a specific group of people, or users, by means of a cooperative or similar structure. This proposal represents a very specific type of transaction and both the owners and the board of directors do not believe that the policy suggested in the proposal would strengthen the value of the 'platform' or of Twitter. Furthermore, limiting the exploration of strategic operations it would not allow administrators to take actions that are in the best interests of Twitter and its shareholders. We believe that Twitter is on track to continue to build its own long-term value for all our shareholders, as a listed company and not as a ‘cooperative structure or the like’ of exclusive ownership of ‘its users’. As a listed company, our users are free to become Twitter shareholders, with no need to change the structure of the company. "The last crucial point: users can take possession of Tiwtter, when they are ready to buy actions. This unanimous opposition by the board of directors makes the proposal unlikely to pass. And even if it happened, there would be no guarantee that Twitter could make a cooperative.
In any case, this is an interesting proposal for a large technology company. In these days there is a tendency to consolidate power and founding voting rights. Thanks to a radical proposal, Mark Zuckerberg is selling a large part of his Facebook shares (to finance his philanthropy), while maintaining his voting rights. A relatively rare exception is the Kickstarter crowd-funding platform, which is a public benefit corporation (a corporation of a public good) and which represents a status that requires “taking into consideration the impact of decisions on society, not just on shareholders.