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Tweet this: Twitter insiders aren't cashing out yet

April 14, 2014: 12:01 PM ET

Twitter co-founders Jack Dorsey and Evan Williams looking sharp at Time's Most Influential People gathering.

Twitter's founding fathers became billionaires on paper when the social media company went public in November.

But Jack Dorsey and Evan Williams say they have no immediate plans to turn those paper gains in to cold, hard cash once they have the opportunity in May.

Under federal securities law, company insiders must wait six months before selling any shares following an initial public offering.

The so-called "lock up period" is designed to discourage insiders and venture capitalists from turning a quick profit after taking a company public.

So far Dorsey and Williams, who are both on Twitter's board of directors, say they have "no current plans to sell any of their shares of Twitter common stock," when the lock up period ends, according to a document filed Monday with the Securities and Exchange Commission.

Twitter CEO Richard Costolo has no immediate plans to sell either.

Related: Meet Twitter's billionaires

The move could be a sign that Twitter's ruling elite are in it for the long haul. Or, they may just be waiting for a better time to sell.

Twitter's stock (TWTR) shot up 73% on its first day of trading. It had a spectacular run late last year, rising to a high near $75 in late December.

But Twitter has been punished along with many other high-flying momentum stocks in the past few weeks. The stock has fallen back to its all-time low, though it was rebounding a bit Monday.

Of course, no one should feel too bad for Twitter or its founders.

Even with Twitter shares near the rock-bottom point of its short tenure as a public company, the three insiders would make a fortune if they decided to sell out.

At about $41 a share, Williams' 12% stake is worth more than $2 billion. Dorsey, who owns nearly 5% of the company, would walk away with more than $1 billion. Costolo's take would be about $400 million.

While the founders and current CEO have signaled that they'll stick it out for a while, it remains to be seen whether other big Twitter insiders will do the same.

Peter Fenton, a Twitter board director and an early investor in the company, owns a stake worth roughly $1.3 billion.

Six institutional investors own 5% or more of Twitter. The biggest player is private equity firm Rizvi Traverse, which has a nearly 18% stake that is worth about $3.8 billion.

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Ben Rooney
Ben Rooney
Staff writer, CNNMoney

Ben Rooney is a staff writer for CNNMoney. He covers the European debt crisis and other international finance stories, in addition to writing about stocks, bonds, investing and other Wall Street-related news. Follow Ben on Twitter: @ben_rooney

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