Twitter Says Co-Founders, CEO Have No Plans to Sell StockAri Levy
Twitter Inc.’s co-founders, chief executive officer and largest investor have no immediate plans to sell shares, as the company seeks to temper concern that its stock will soon flood the market.
Jack Dorsey and Evan Williams are hanging onto their stakes through the company’s May 5 expiration of its share lockup, as is CEO Dick Costolo, the San Francisco-based company said today in a regulatory filing. Rizvi Traverse Management LLC, whose 14 percent stake makes it the biggest investor, also has no intention to sell, a person with knowledge of the firm said.
The microblogging service held its initial public offering on Nov. 6. After almost tripling in value in their first seven weeks on the market, peaking on Dec. 26, shares have dropped 44 percent amid slowing user growth and a broader slump in technology stocks. Twitter said in February that monthly active users in the fourth quarter rose 30 percent from a year earlier to 241 million, slowing from 39 percent in the prior period.
Twitter is trying to avoid the fate of rival Facebook Inc. The social-networking site’s largest outside investors, including Peter Thiel and Accel Partners, sold large chunks of their stakes at the earliest opportunity after the company’s 2012 IPO, while the stock was already falling.
Jim Prosser, a spokesman for Twitter, declined to comment beyond the filing with the U.S. Securities and Exchange Commission.
$3.5 Billion Stake
Rizvi Traverse’s Twitter stake is valued at about $3.5 billion. Venture capital firm Benchmark, which owns about 5 percent of Twitter, also has “no present intention” to sell or distribute stock before or right after the expiration, the company said in the filing.
If the co-founders or CEO decide to sell, they’re required to enter into and follow a trading plan that complies with SEC rules, Twitter said today. Under the company’s policies, the earliest Williams, Dorsey and Costolo could sell would be 90 days after the next open trading window, according to the filing.
Twitter shares rose 2.1 percent to $40.87 at the close in New York. They’ve fallen for seven of the past nine trading days. Williams owns 9.4 percent of the company he co-founded in 2006, while Dorsey holds 4 percent, according to another filing last week. Costolo owns 1.4 percent of the shares.