Twitter executives are not offloading shares under their divestment programs after facing criticism from investors for the recent rash of sales. Insiders are not selling the stock any more, says a report from Bloomberg, which cites sources who claimed that these plans are either expired or been cancelled.
Twitter executives face criticism
Top rank executives have stopped selling their shares to build up confidence in the company. After the expiration of the first lockup period in May 2014, CEO Dick Costolo said he and other executives were looking to hold their stakes, not suggesting any time limit. However, towards the end of the year, Costolo and other insiders started selling millions of dollars’ worth of Twitter stock. Since July 2014, Costolo has offloaded $35.2 million in shares, according to data compiled by Bloomberg. Twitter stock dropped 28% in 2014.
Investors and analysts did not welcome the decision of the company’s executives and inside shareholders of selling the stock even after the same executives asked investors to have confidence on the company. Some of the strongest criticisms were made by Jim Cramer, host of CNBC’s Mad Money, and Robert Peck, an analyst at Suntrust Robinson Humphrey, says the report.
No word about 10b5-1
Prior to this report from Bloomberg, a report from Fortune earlier informed readers about the executives being asked to stop selling their stakes. The executive trading plans known as 10b5-1 plans say insiders are required to submit a share sale plan in advance to the US Securities and Exchange Commission (SEC) to ensure that they are not selling their shares based on inside knowledge of a company’s performance.
There is no information about whether Twitter executives have cancelled their plans or just did not renew them, but there are rumors that they are no longer in effect for the company’s senior executives, according to Fortune. Co-founder EV Williams is the only executive who is still using the plans to offload his stake and has sold more than $45 million worth of Twitter stock since the expiration of the lockup. The last 10b5-1 sale was done on Feb. 6. Since then, the stock has surged by around 25%.
On Wednesday, Twitter stock closed up 0.83% at $51.73, and year to date, the stock is up by over 44%.