Twitter Inc (NYSE:TWTR) Chief Executive Dick Costolo’s family trust offloaded half of their shares this month, adding more to the shares already sold in July, according to a report from Bloomberg. The Richard Costolo 2001 Living Trust and Lorin Costolo 2001 Living Trust sold 283,460 shares in transactions on Nov. 3 and Nov. 17 for $11.6 million, according to regulatory filings.
After the transactions, Costolo owns 36,028 shares in the company directly, 509,828 unvested restricted stock units, and 283,460 shares through the trusts.
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Before July, the CEO and his family trust did not sell a single share of Twitter. In July, Costolo sold 16,698 shares, and then 20,106 shares in October. In one of the filings in November, for the first time, the CEO mentioned his 10b5-1 trading plan, which is usually used by executivea to sell shares on a regular basis. Twitter has placed no restrictions on stock ownership for the executives.
Jim Prosser, a spokesman for Twitter, said, “Dick’s stock sales were done in accordance with a trading plan put on file 90 days ago to help him diversify his investments over time.” Prosser said that the plan was made before the sales started.
Costolo’s approach in question
Twitter shares have tumbled on the back of slowing user growth, which has kept Costolo in the news all year. Shares slipped more than 35% this year, and in April, Costolo, along with other insiders like Jack Dorsey, co-founder of the company, decided to keep their holdings intact even though the lockup expired. Other top executives such as then-Chief Financial Officer Mike Gupta and then-Chief Operating Officer Ali Rowghani sold their shares after the lockup expiration.
Costolo’s decision of showing the exit door to some executives this year has been questioned by investors. The CEO expelled Rowghani and Gupta. Earlier this month, Standard & Poor’s gave Twitter’s debt an unsolicited junk rating.
Costolo has defended his management style, saying that Twitter still holds the capability to expand its user base with 500 million more users who visit the site each month but do not log in. The micro-blogging site has its league of supporters in the form of early investors such as Chris Sacca and venture capitalist Ben Horowitz.