Twitter Inc (NYSE:TWTR) enters a new era tomorrow, but you wouldn’t know it by the stock price today. Shares rose as much as 1.5% in midday trading—one day before the company’s insiders will be allowed to start selling off their stock.

Twitter Earnings

Twitter IPO agreements expire tomorrow

Non-executive employees of Twitter Inc (NYSE:TWTR) will have their first opportunity to sell their shares of the micro-blogging company starting tomorrow. According to The Wall Street Journal, these first shares which are being unlocked are typically given to non-executive employees as “a way to settle income tax expenses from vesting shares.” This is the very first lockup expiration, and according to TechCrunch, almost 9.9 million shares will unlock. Collectively, they’re currently worth about $565 million and amount to only 1.8% of the company’s outstanding shares.

But this lockup expiration is just a fraction of the one which happens in May, which means that this first lockup expiration is a real test. If there’s a major decline in Twitter Inc (NYSE:TWTR)’s share price in the wake of this first unlock, then it’s likely that we’ll see a much bigger selloff after the expiration which happens in May. At that time, the rest of the 474.7 million shares currently locked up will become tradeable.

Will Twitter nosedive?

Some have been saying that shares of Twitter Inc (NYSE:TWTR) will decline after the shares are unlocked. In fact, it’s not uncommon for short sellers to take an interest in the newly unlocked shares, according to The Wall Street Journal. On the publication’s Bits blog, Yoree Koh notes that Facebook Inc (NASDAQ:FB)’s stock sustained a 6.4% decline back in August 2012 when the first insider shares were unlocked for trading. However, the number of shares which unlocked at that time was over 271 million shares, which amounted to 13% of outstanding shares—a much more significant percentage than what Twitter is unlocking tomorrow.

None of Twitter Inc (NYSE:TWTR)’s insiders sold any of their shares at the initial public offering, and they’re doing very well now because those shares have dramatically appreciated in price. In fact, the stock has more than doubled. So workers who might have wanted to sell some of their company’s shares at the IPO weren’t able to, and now that the stock has doubled in price, they just might want to turn some of their paper profits into real money profits.