Shares of Twitter are trading down about 9.8 percent Tuesday, the day that the company’s six-month lock-up on about 500 million shares expires. That means employees who owned shares in Twitter when it went public are now able to sell off their ownership in the company. Lock-ups are created to prevent everyone from selling off shares in a company the day it goes public.
The declining price suggests shareholders who were prevented from selling earlier are doing so now. However, CEO Dick Costello and other executive members of the Twitter team, who hold the largest stakes in the company, have said they have no intentions of selling off stock. By 9:40 a.m. EST this morning, however, more than 20 million shares of Twitter had already exchanged hands, showing that there’s a lot of selling going on.
Shares of Twitter fell to an all time low of $34.57 this morning — the second time the stock has been beaten up in as many weeks. Twitter beat earnings expectations when it reported its Q1 2014 financials on April 29, though shook up Wall Street on fears of slowing user growth.