Analyst implores Twitter to hire a permanent CEO already

Memo to Twitter's board: stop dragging your feet on finding a new CEO.

That's the message from SunTrust analyst Robert Peck, who says the Internet company needs to fill the vacant CEO office quickly if it hopes to win back investors' favor and avoid more disruption to its business.

Twitter's stock has taken a beating in recent days, following an earnings conference call in which it acknowledged that user growth is stuck in a rut and the news of several high level employees jumping ship. Without a permanent CEO leading the company, investor doubts are growing.

"We think investors are questioning the current state of the CEO search and assessing the rumored parameters, wondering if Twitter is looking for a difficult to find CEO candidate or 'Unicorn CEO," Peck wrote in a note to investors on Tuesday.

It's been nearly two months since Dick Costolo announced his plan to step down as CEO without a successor in place. Twitter co-founder Jack Dorsey is currently serving as interim CEO, even as he continues to work at his other full-time job as CEO of digital payment company Square.

Some people close to Twitter believe that Dorsey is interested in becoming Twitter's full-time CEO, but the Twitter board has said that the next CEO must be willing to make a "full time commitment." A source familiar with the matter told Business Insider that revenue boss Adam Bain is currently the board's top pick, though the board is also looking at a handful of outside candidates.

"Without a permanent CEO in place with a clear vision and strategy, we continue to worry about a sustained 'brain drain' of talent (as seen so far) as well as a middle management obstruction of decisions," Peck writes, urging the search committee to move "prudently but quickly."

Otherwise, he notes, an acquisition may be the most likely outcome. And with Twitter's market cap now under $20 billion, the potential for a take-out is more likely.

Finding a CEO for a company like Twitter is no easy feat. As Peck himself notes, the list of key qualifications necessary for the CEO - deep knowledge of the product, being an active user of the service, expertise in monetization and willingness to undertake a turnaround and to inspire employees - will be tough to find in a single candidate.

Instead he says that a "triumvirate of power" feature Dorsey, Bain and co-founder Evan Williams taking on more leadership on the board of directors, may be the most likely scenario.