Twitter sinks to new low as ‘lockup’ expires

Twitter co-founders and its chief executive indicated they have no short-term plan to sell their shares

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Twitter shares tumbled to fresh lows on Tuesday, under pressure after the expiration of the so-called lockup period, which banned sales by company insiders after its public offering.

The stock was down 11.5 percent at $34.30 in late morning trade, the lowest level since the Twitter initial public offering last November.

Under U.S. securities lockup rules, some insiders were barred from selling for a period of time after the social network’s IPO.

The lockup expired on Tuesday, but Twitter co-founders Jack Dorsey and Evan Williams and chief executive Dick Costolo indicated they have no short-term plan to sell their shares.

Twitter made a spectacular Wall Street debut in Nov., rising from its $26 offering price to more than $70, but has been hurt by concerns about slowing growth and doubts on profitability.

Paul Ausick at the stock market website “24/7 Wall Street” said Twitter has also been hurt by a disappointing quarterly report which showed only modest user growth.

“One bit of good news is that CEO Dick Costolo told CNBC that the company has no current plans for a secondary offering because most of the big shareholders do not need the cash immediately,” Ausick said in a blog post.

“Twitter stock may be a safe buy for a while, but unless the company can crank up its subscriber numbers, all those shares lurking in the background are an albatross that the company does not need.”

Twitter said in a regulatory filing in March that “the market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market, and the perception that these sales could occur may also depress the market price of our common stock.”