Twitter is trending today on Wall Street, but for all the wrong reasons.
Shares of the social media site tumbled to a new low Tuesday, the first day that company insiders were allowed to sell the stock following the company's initial public offering.
The sell-off comes at the end of a six-month "lock-up" period in which Twitter executives and other employees were barred from selling the 470 million shares they were granted before the company went public.
Twitter co-founders Jack Dorsey and Evan Williams, along with current CEO Dick Costolo, have said they aren't selling. They are among Twitter's biggest shareholders, but there are others who own the stock, and they appear to be selling today. The worry is that these insiders are disposing of their shares before the stock goes even lower.
A spokesperson for private equity firm Rizvi Traverse, which has an 18% stake in Twitter, did not immediately respond to a call requesting comment.
While it's not unusual for a stock to fall when the lock-up period ends, Twitter was hit particularly hard. Among the social media companies that have gone public in recent years, Twitter had by far the biggest decline on the day of its lock up expiration, according to Bespoke Investment Group. Groupon's stock (GRPN) fell nearly 8% when insiders were freed from lock up in 2012. Shares of LinkedIn (LNKD) fell more than 6% on its lock-up expiration day.
In a sign of the heavy selling, Twitter was one of the most actively traded stocks Tuesday, with more than 109 million shares trading hands. On an average day, trading volume in Twitter stock is about 13 million shares.
Ouf, $TWTR's shellacking is kind amazing tbh. Just surpassed the 2nd largest volume day (Coincidentally, The top!). Only IPO day had larger.
— Jerry Khachoyan (@TheArmoTrader) May 6, 2014
Twitter shares have been highly volatile since the IPO. The stock, which was initially priced at $26 a share, soared 73% on its first day. But it really took off in December, rising to a high of nearly $75 a share just before Christmas. The stock went into a tailspin shortly after that. Twitter shares are down more than 45% so far this year.
At current prices, Twitter now has a market value of just about $19 billion. That's down from more than $44 billion at its peak in December.
Twitter's current market cap is $19 billion, the same amount Facebook spent on WhatsApp. $TWTR
— Eli Langer (@EliLanger) May 6, 2014
Investors have been worried about Twitter's user growth. In April, the company said its monthly active user growth ticked up just 6%. In addition, the number of monthly active users viewing the service's "timeline" -- the list of tweets people write -- remained flat from the fourth quarter and down 8% year-over-year. That's not a good sign for Twitter's influence.
Many companies make up ground with strong international growth, but Twitter is struggling there as well. User growth outside of the U.S. was 27% in the first quarter, down from 34% at the end of last year.
The slowdown in user growth overshadowed Twitter's strong revenue gains in the quarter. It broke-even in terms of earnings.
Analysts currently expect Twitter to report a modest loss for the second quarter, though they believe it will turn a profit this year, according to FactSet. Revenue is expected to continue growing a a robust pace, however.
Today the stock has one trend: #lower.
-- CNNMoney's Matt Egan contributed to this report.
Yahoo CEO Marissa Mayer may have a spring in her step this morning. Yahoo's stock is higher following the news that Alibaba, the Chinese leader in e-commerce, was preparing to file for an initial public offering in the United States.
Yahoo owns a 24% stake in Alibaba. The stock has been volatile for the past few days due to speculation about a possible IPO filing from Alibaba.
Alibaba has been compared to MOREPatrick M. Sheridan - Mar 17, 2014 1:23 PM ET
The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.
Traders are salivating about the upcoming initial public offering of mobile game developer King Digital Entertainment, the company behind the insanely popular "Candy Crush Saga."
King disclosed Wednesday that it could be worth $7.6 billion following MOREPaul R. La Monica - Mar 13, 2014 12:56 PM ET
Here's a fun fact: The stock market, as measured by the S&P 500 (SPX), had its strongest performance this year since the Wolf of Wall Street roamed lower Manhattan.
The broad market gauge has gained 29.6% in 2013, its biggest jump since 1997 -- the year before Jordan Belfort, the hard-partying founder of brokerage firm Stratton Oakmont, was indicted for securities fraud and money laundering.
Belfort, who served nearly two years in MOREBen Rooney - Dec 31, 2013 7:22 AM ET
Facebook shares rallied an impressive 30% Thursday, allowing the stock to book its best one-day gain ever. And while shares remain about 10% below the May 2012 IPO price of $38, analysts are predicting that Facebook is finally on its way to reaching, and even crossing, that threshold.
"Facebook delivered its strongest quarter yet as a public company -- results that we think could be thesis-changing for many," said Doug Anmuth, a MOREHibah Yousuf - Jul 25, 2013 4:03 PM ET
Noodles & Co. must be carbo-loading. Shares of the casual restaurant chain have been on quite the run since making their public debut last week.
The stock more than doubled on Friday -- its first trading day -- and is up another 25% Tuesday thanks to kind words from CNBC's Jim Cramer on his Monday evening show. The Mad Money host said that Noodles & Co. (NDLS), which offers dishes ranging from MOREHibah Yousuf - Jul 2, 2013 3:06 PM ET
Tesla's stock soared into record territory Monday after the electric car maker received another upgrade from Wall Street analysts.
Tesla (TSLA) shares ended the day at a record $117.18, gaining more than 9%.
The rally came after analysts at Jefferies raised their price target to $130, saying the company is likely to report stronger-than-expected sales of the new Model S this year.
Tesla's stock price has exploded. It's gained a whopping 240% in the past MOREBen Rooney - Jul 1, 2013 4:45 PM ET
Federal law enforcement officials arrested a Florida man Tuesday for allegedly defrauding investors by telling them he had access to shares of Facebook before its initial public offering.
The U.S. Attorney's office in New York said Craig Berkman, 71, received a total of $8 million from investors who thought they were investing in Facebook (FB) prior to the social network's IPO last year.
Berkman also allegedly misled investors about his access to MOREBen Rooney - Mar 19, 2013 3:49 PM ET
In the biggest IPO since Facebook, animal health company Zoetis generated strong demand from investors early Friday.
Shares of Zoetis (ZTS) surged as much as 22% in its debut on the New York Stock Exchange.
The company, which spun off from pharmaceutical giant Pfizer (PFE), sold 86.1 million shares at $26 apiece late Thursday. The stock traded as high as $31.74 before easing slightly but still remained above the IPO price.
The offering MOREBen Rooney - Feb 1, 2013 10:52 AM ET
Norwegian Cruise Line (NCLH) sailed more than 30% above its initial public offering prices when its shares debuted on the Nasdaq (NDAQ) Friday.
The third largest cruise ship operator in North America sold 23.5 million shares for $19 apiece -- slightly better than the estimated range of $16 to $18.
Norwegian Cruise Line plans to use part of the $446 million it raised to pay down some of its $3.1 billion MOREMaureen Farrell - Jan 18, 2013 11:49 AM ET
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