Insider Sales That Crashed Twitter Were Years Old

When Twitter shares plummeted a week ago as the lock-up period ended for the company's insiders, it was not immediately clear who was selling, especially since founders Jack Dorsey and Evan Williams, as well as chief executive Dick Costolo, said they wouldn't. Data from Securities and Exchange Commission Form 4 filings, which insiders have to post every time they make a deal, take a few days to surface. Now they have, and an arcane move by what used to be Twitter's biggest outside shareholder may explain what's going on.

RTLC Management, owner of 85.17 million Twitter shares, or 14.4 percent of the microblogging platform's stock, filed three Form 4 statements1 to report transactions that took place on May 6, the day trading volume in Twitter reached a record for this year. The transactions were not sales, but rather "pro rata liquidating distributions." RTLC Management liquidated itself, handing all of its Twitter shares to underlying entities with names such as RT-FF SM II and RT Spartan III. Most of them list the same address in Birmingham, Michigan, and the RT in the names derives from Rizvi Traverse, the investment vehicle of Suhail Rizvi, a secretive Indian-born financier who helped Hugh Hefner take Playboy Enterprises private and who has recently been taking stakes in technology companies.