Almost 500 million additional shares of Twitter Inc (NYSE:TWTR) stock flooded the market today as the second lockup on insider-owned shares expired last night. In the wake of that lockup, Twitter stock plunged to a new all-time low of around $35 a share.

Twitter TWTR

Where will Twitter go next?

Some of Twitter Inc (NYSE:TWTR)’s top management, its co-founders and biggest shareholders have said they will be holding onto their shares of the micro-blogging company. Among those who said they wouldn’t be selling today are co-founders Jack Dorsey and Evan Williams, CEO Dick Costolo, Rizvi Traverse Management and venture capital firm Benchmark. If they were selling their Twitter stock, the dive would be even worse.

Speaking on CNBC this morning, Josef Schuster of Ipox Schuster LLC said he didn’t think much would happen with the lockup expiration today. He said Wall Street is probably relieved more insiders won’t be selling.

Short sales of Twitter may increase

He did say that there will probably be a greater effect in the medium to long term, however, because of the increased share count. About 480 million shares were added to the number of Twitter Inc (NYSE:TWTR) stock which can now be traded. Because of the higher share count, he said the cost of borrowing the company’s shares will go down. As a result, he predicts that short-selling will increase.

In addition, he said “people are going to take money off the table.” He noted that some insiders still have substantial gains in Twitter Inc (NYSE:TWTR) stock, in spite of the fact that its share price has declined so much since the beginning of the year.

Problems with Twitter stock

CNBC noted that there’s been a recent sell-off in momentum stocks in general, which has probably had a negative impact on Twitter Inc (NYSE:TWTR) stock. Schuster said Twitter in particular has probably been hurt more because of slowing user growth, which has spooked investors. After each of the company’s two earnings reports since it went public, the stock declined significantly because of decelerating user growth numbers. However, the stock still had been trading at 18 times 2014 projected revenues, which is still quite a premium and makes it very expensive compared to peers in the market.