Boston, MA 05/06/2014 (wallstreetpr) – Nearly 480 million shares or 82% of the outstanding shares of Twitter Inc (NYSE:TWTR) will be open up to sell today, but the biggest investors in the microblogging company are in no mood to part with their share.
Soothing For Twitter
Notably, today is the expiration day of the lock-in period of the shares since they were first purchased during the November initial public offering of the company. In a case, the option to sell is executed by these big investors than the share prices of the company could hit a steep bottom. However, the company hears some relief from big investors like Evan Willians, co-founder of Twitter, and a venture capital firm, Benchmark, who have clearly said that they will choose to hold the stock then sell. Both Evan Williams and Benchmark Capital Management Co LLC hold 55.7 million and 31.6 million shares respectively.
Chris Sacca, another investor claiming 15% of ownership of Twitter Inc (NYSE:TWTR)’s share through several arrangements also affirms his option of holding on while he states that analysts and other investors are more concentrated on slowing user growth, instead of recognizing the true value that Twitter can bring on. In the meantime, Twiter’s Co-founder Jack Dorsey, who holds more than 22.2 million of its shares along with the company’s CEO Dick Costolo have confirmed to retain their stakes, according to an April 14 regulatory filing. Rizvi Traverse Management LLC, who has a 14% stake and thus, occupies a position of single biggest investor, will hold its shares too.
No Plans Of Secondary Offering
Based on the confirmations from the bigger stakeholders, Sterne Agee & Leach Inc.’s analyst, Arvind Bhatia mentioned in a note to investors that the vote of confidence has been able to soften the pressure on the company. The research firm currently has a ‘hold’ rating on the stock.
The expiration of the lockup period comes at a time when the internet stocks are already suffering a spate of rundowns. While the company is still trading 5% above its initial IPO price of $26, but it is been subjected to mounting doubts of growth prospects. The company’s report of declining monthly active users last week has further added to the fears. Sacca, on the other hand, supports the growth potential of Twitter Inc (NYSE:TWTR) and rejects the idea of putting Twitter in the same basket with that of Facebook. Furthermore, Twitter’s Chief Financial Officer Mike Gupta’s statement that Twitter will not follow any secondary offer strengthens the hope that microblogging is here to stay.
