Twitter’s share price down 18% to $31.85
07 May 2014
Twitter's share price declined 18 per cent to an all-time low of $31.85 at the close of trading yesterday in New York, with insiders being able to sell the social media company's stock after the initial public offering in November.
According to a statement by company to the US Securities and Exchange Commission, chief executive Dick Costolo as also co-founders Jack Dorsey and Evan Williams had promised to not sell immediately after the 180-day lock-in.
However, the micro-blogging network's, shares plunged on higher-than-usual volume.
Twitter's lockup expired only a week after shares fell following the company posting a net loss at $132 million for the first quarter, despite a 119 per cent increase in sales.
According to market watchers the immediate cause of the plunge was the end of the lock-in period, enabling investors to divest their stake. Young companies that go public typically bar employees and investors from stock sale for a period to prevent the market from being inundated with shares.
In Twitter's case, the end of the lock-inyesterday came with growing concerns about the microblogging company's ability to capture a mainstream audience.
The company's recent quarterly results had sparked concerns about its ability to attract new people and retain their interest.
The company sold around 80 million shares to the public in its initial offering, and around 10 million more shares held by employees became available in February.
