Let the salted-caramel ice cream and craft beer run like lava. We're through the looking glass now, people. Tomorrow the first piping-hot batch of insider Twitter stock will be set free. This means that non-executive employees can sell some of their shares. "Nearly 9.9 million shares will be set free on Saturday, worth around $565 million." But this is just the beginning.
Alex Wilhelm of TechCrunch has more:
The February unlock pales in comparison to the much larger one coming in May, making tomorrow’s sale point an early test for Twitter: A large decline in its share price following the smaller unlock could portend a sharper decline when far more shares become salable.
There is some sentiment in the market that the unlocked shares will cause Twitter to wobble. No insiders sold at the time of the company’s IPO, which ended up working in their favor: The company’s share price has more than doubled since its flotation; employees that might have wished to sell a portion of their shares at IPO as a hedge didn’t get the chance to do so, and thus enjoyed the upside by default.
Jealous? I sure as hell am. And who knows just how these kids will spend their presumably voluminous amounts of money — frankly, it's none of your business. It really isn't. I just pray that San Francisco doesn't turn into one large Valencia Street. Because that would be terrible. Just the worst.
Anyway, the Wall Street Journal reports that the company's stock has been acting up as of late, noting: "Twitter’s stock has been fickle in recent weeks. The stock still hasn’t fully recovered after a disappointing earnings report sent the shares down as much as 24% last week. Twitter’s stock inched up 0.25% to $57.03 Thursday morning. It had reached a high of $74.73 in late December." Also, they won't be able to sell that much, only enough to cover income tax expenses.
This first chunk of shares available for sale is small. It represents just 1.8% of outstanding shares and is mainly to give non-executive employees a way to settle income tax expenses from vesting shares. In comparison, Facebook freed more than 271 million shares — or nearly 13% of those outstanding, in the first lockup. Four more expirations for Facebook shareholders came up over the next nine months, releasing 1.4 billion more shares into the market place. The biggest release came 181 days after the IPO, as will Twitter’s.