Twitter Inc. to provide insiders with the opportunity to sell shares as lock-up ends

Currently, Twitter Inc. provides its users with real-time short messaging and multimedia messaging services that work over multiple networks and devices. The shares of the company more than doubled since its initial public offering that was made in November 2013. Now the company is said to be ready to provide its insiders with the first chance to sell their stock.

At the initial public offering of the company there were no insiders, who sold their stock. This means that none have been able to get an advantage of the run-up in the stock price.

According to filings with the U.S. Securities and Exchange Commission, as many as 9.87 million shares owned by non-executive employees of the company will become eligible for sale after the expiration of the agreements that locked them up after the initial public offering of the company. According to data compiled by Bloomberg, this is expected to increase the number of shares available for trading by 12% to about 90 million. More stock is said to become available for trading in May.

Twitter Inc. was reported to have decreased by 14% since it posted its earnings report last week. The report in question showed slowing sign-ups growth and dropping usage.

Max Wolff, chief economist and strategist of ZT Wealth, explained that while lock-up expirations can have influence on Twitters stock, they will eventually bring the company to a more justified price given its prospects.

Mr. Wolff said for Bloomberg: “Twitter stock was on an unbelievable tear after the IPO, and then hit a wall of worry around the earnings, and now is going to be tested with this lockup expiration. These are all steps on the road to evaluating Twitter not as a great story, but as a publicly traded company with a stock price you have some kind of rational thesis around, and that’s healthy.”

The biggest shareholders of Twitter Inc. include the companys co-founder Evan Williams, who owns about a 10% stake, and Rizvi Traverse Management LLC, which owns close to a 16% stake along with its affiliates after the companys IPO in November last year. Some of the other shareholders are: Benchmark Capital, Union Square Ventures, Spark Capital, etc.

Twitter Inc.s shares rose by 0.60% to $56.81 by 14:41 GMT on Friday. According to CNN Money, the 29 analysts offering 12-month price forecasts for Twitter Inc. have a median target of $53.00, with a high estimate of $75.00 and a low estimate of $32.00. The median estimate represents a -6.14% decrease from the last close.