Twitter plunges as share lockup expires

Twitter’s stocks dipped early Wednesday, April 30, 2014, following its first-quarter earnings report. A banner with its logo hangs on the facade of the New York Stock Exchange in New York after the company went public in November 2013. (Mark Lennihan, AP)

 

 

 

Investors continue to sour on Twitter.
The social network’s stock plummeted 11.8% in midday trading, as the company’s lockup of shares expires Tuesday.

Lock-up periods prevent company insiders from selling stock following an initial public offering. Once the lockup expires, 500 million shares of Twitter common stock will be up for sale. The end of the lockup frees up 470 million common shares for sale, reports Reuters.
As of noon ET, Twitter shares sat at $34.35, the lowest point the stock has been since its initial public offering launched last November.
In a filing with the Securities and Exchange Commission last month, Twitter confirmed co-founders Jack Dorsey and Evan Williams and CEO Dick Costolo have no plans to sell their shares.  Williams owns the largest stake of Twitter shares at 9.4%, followed by Dorsey at 4% and Costolo at 1.4%, according to the SEC filing.

Twitter’s IPO exploded on to the scene in November, jumping well above its $26 IPO price. However, shares have slumped as investors seek stronger growth in the company’s user base. After reaching a 2014 peak of $69, Twitter shares have lost nearly half their value.
During the first quarter, Twitter topped estimates with revenue of $250 million and a break-even earnings per share. But its monthly active user base of 255 million for the quarter fell short of the 262 million forecast by Wall Street.
Contributing: Associated Press

Source:
http://americasmarkets.usatoday.com