Twitter Insiders Get Set to Cash In

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Feb. 14 (Bloomberg) –- ZT Wealth Chief Economist Max Wolff discusses Twitter insiders getting their first chance to sell their shares. He speaks to Cory Johnson and Emily Chang on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

Does that sound right?

It sounds like one of those averages that is like -- the average family has 1.3 kids.

If you get caught with .3 kids, you are in trouble.

I would have to concur with corey's points there.

The average might not be all that illustrative in this case.

How will this impact twitter share prices?

I do not think it will be a big deal.

You will see a coming around and focus of some of the more bearish sentiment on the name.

It is priced in already.

I do not think it is existentially important.

The real challenges for twitter we know.

Twitter will best those.

This is a maturation point, into being a part of the public markets and a portfolio element.

I do not think it is a great point of impact on twitter going forward.

It might be the people decide to take their winnings and leave.

Once they're able to sell the shares, you wonder about the brain drain that could happen.

We have seen that at some and a silicon valley companies.

A year or so after the ipo, people decide they have achieved a certain amount of personal wealth and walk away.

We saw that at google and yahoo!. people go from those companies to start new companies or start a vineyard in napa.

We will see some of that.

Twitter was fairly aggressive.

They sucked up a lot of other firms.

They made a lot of those other purchases with stock.

Folks who did not intend to be at twitter are at twitter.

Now they have shares that have nicely appreciated.

Baby they will be the first guys and gals to look for the new startup opportunity in the area and be a part of that energy.

How would you compare the way that twitter is handling the lockup process to how facebook handled the lockout process?

It is a smaller release.

We will get a test of this when we see a big lock up many many times the size of this expiry.

Facebook has such a wild flurry of unconstrained trading.

It created a bit of an overhang of some folks who are trapped in there, just trying to get their money out, particularly given facebook had a much less pleasant initial ipo than twitter did.

There are always new found millionaires who are under pressures, whether that is to pay taxes or buy a home or support a family member, who will of for an exit.

Some of those folks will make it out the door with this expiry.

Are we going to see a secondary?

What would that tell you about what's going on with facebook, if a lot of secondary shares are offered?

Whether it is employees selling shares or the company selling treasury shares?

We will see a bit of both there.

Facebook has been settling into a pretty aggressive valuation as of late and that will be the true test of that valuation.

Secondaries are more of a test of thesis then and expiry, particularly a small expiry.

Facebook is doing well, beginning the process of earning its valuation.

There are a lot of people who want to turn this into money.

There's a lot of people who want to go back in and by the next facebook.

We saw with zynga, the secondary was announced so soon after the ipo that while some of the insiders, in the case of mark pincus, were able to sell in the secondary.

The other employees were locked up.

If twitter were to follow the same playbook, with that concerning what all as far as the effect on the morale of the company?

It would concern me.

There's almost no chance we see things handled that way.

A lot of managerial and performance issues started intensely.

One of the lessons of zynga is to not spend more than your total free cash flow in a year, and then announce a secondary.

If i'm a twitter employee, should i sell now?

I don't think you have to.

Selling for diversification is a wealth management strategy.

If you want to be a part of the story of the evolution of the valley, you do need some free cash flow.

You sell some.

I don't think you're walking away.

This text has been automatically generated. It may not be 100% accurate.


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