Twitter CEO Dick Costolo Resigns Amid Stagnant User Growth

Shares of Twitter initially rose 7 percent in after hours trading after it was announced that its CEO Dick Costolo had decided to step down, a decision that will go into effect less than three weeks from now (July 1, 2015). Twitter co-founder and chairman of the board Jack Dorsey will step into Costolo's shoes as interim CEO while the microblogging service searches for a permanent replacement.

"I am tremendously proud of the Twitter team and all that the team has accomplished together during my six years with the company. We have great leaders who work well together and a clear strategy that informs our objectives and priorities," Costolo said. "There is no one better than Jack Dorsey to lead Twitter during this transition. He has a profound understanding of the product and Twitter's mission in the world as well as a great relationship with Twitter's leadership team. I am deeply appreciative of the confidence the Board, the management team and the employees have placed in me over the years, and I look forward to supporting Twitter however I can going forward."

Dick Costolo

Costolo's departure follows a rash of changes in upper management that he made last year. While it seems sudden, there are reports that he brought up the idea of stepping down with the board last year, giving the company plenty of time to formulate a strategy for the post-Costolo era.

There are also reports that Costolo grew increasingly aggravated with living under the financial microscope of Wall Street analysts. Even though Twitter is now home to 302 million users, growth has slowed, and that's been a cause of concern for investors.

However, it's the overall financial picture that's been the bigger issue for investors -- Twitter posted a loss of $162 million in the first quarter of 2015 and came up a little short of its revenue forecast. At the time, Costolo said in a statement he and his company remained "confident in our strategy and in Twitter's long-term opportunity." Less than two months later, he's headed towards the door.