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With Square IPO on Tap, Jack Dorsey Needs to Pull Out of Twitter CEO Search

Twitter and Square employees have been left in limbo on the topic. Dorsey now has a chance to change that.

Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

Jack Dorsey has said he’s not leaving his CEO role at Square. Twitter has said its next full-time CEO has to be, well, full time. In a rational world, the two parts of this equation should equal Jack Dorsey, the interim CEO of Twitter and full-time CEO of Square, not becoming Jack Dorsey, the next full-time CEO of Twitter.

But since we apparently live in some bizarro world where neither side can declare that Dorsey is not going to be the next permanent CEO, Twitter and Square employees have been left in limbo on the topic. Dorsey now has a chance to change that. A source tells Re/code that Square has filed paperwork with the SEC outlining its intention to go public, confirming a report from Bloomberg, and it will likely file a public version of the documents by the fall, according to the source.

This timeline suggests that Square, which processes payments and makes software for small businesses, would IPO by year’s end, as Forbes reported it would. Dorsey cannot possibly leave the Square CEO role in the all-important lead-up to the IPO, as he and his executive team go on a road show to convince investors why they should back his company. Nor can he leave in the first handful of months after an IPO, unless he wants to send would-be Square investors a very bad message. In addition to being CEO, Dorsey is also the company’s largest shareholder with a 26.2 percent stake.

That leaves Dorsey with a very simple solution: Use the IPO as an opportunity to officially pull out of the Twitter CEO race. There are only two reasons I can think of why he hasn’t yet. First, he may think it would look bad for the company if one of its founders says he’s not interested in the job. But even so, that only holds a half a cup of water because Dorsey runs another company, which is a fairly rational excuse.

The only other likely reason is that Dorsey thinks there’s still a sliver of a chance that he will be allowed to run both companies permanently — even though Twitter’s search committee has already eliminated that option. Why would he hold out that hope anyway? Because sources say Dorsey has in fact been intrigued by the prospect of leading Twitter, his first entrepreneurial hit.

Still, Square’s IPO should officially kill that pipe dream. And it would be better for everyone if Dorsey just said it out loud.

Square and Twitter reps declined to comment.

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