News Column

Technology: Twitter shares fall 10% as lockup period ends

May 7, 2014

Juliette Garside



Twitter shares fell more than 10% as Wall Street opened for business yesterday, marking the end of the lockup period that prevented executives, early investors and other insiders selling up to $20bn (pounds 12bn) in stock following the social network's flotation last year.

Although owners representing a large proportion of the newly tradeable shares have promised to hold on to them for now, the lockup expiry is likely to put further pressure on a stock battered by fears of a technology valuation bubble. Twitter's shares are under pressure, trading at close to half the $75 peak reached at Christmas and below the closing price on the first day of the flotation six months ago.

"This is clearly lockup-related," said new-media analyst Brian Wieser at Pivotal Research Group. "Not every investor will refrain from selling, many of which include early employees of the company who may want to take money off the table. Even if they don't sell, the fear among investors will cause selling."

Yesterday marked 181 days since Twitter's initial public offering on 7 November, with more than 560m shares becoming eligible for sale. Investors fear that Twitter employees and early investors could flood the market.

In the first few hours after the opening bell at the New York Stock Exchange, shares fell by 11.6% to just below $35.

Twitter sold 70m shares in its initial public offering, but as of yesterday many times that number were freely tradeable. Juliette Garside



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Source: Guardian (UK)


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