Twitter is still a private company, and despite the rush of adrenalin that LinkedIn’s IPO and Facebook’s filing have given investors interested in social, it’s not likely to change that fact any time soon. Twitter has in place a limit on the amount of stock its employees and other shareholders may sell, limiting it to 20 percent of their shares. And not everyone is happy about this policy.
CNN Money got its hands on some emails that detailed the stock restriction. It has apparently been in place for over a year, but details are just now leaking out.
Twitter does not allow its shareholders to sell more than 20 percent of their stock privately. And since it’s not a publicly traded company, that’s the only way they can sell.
CNN Money reports that this rule was a direct cause of Evan Weaver, Twitter’s senior technical engineer, leaving the company in August. He had apparently sent an email to the entire company saying that he was leaving over “policy disagreements” – which turned out to be the limitations put on the selling of Twitter stock.
Twitter’s CEO Dick Costolo responded to this email at the time, saying the restriction was in place partly to keep the number of investors below 500 (at which point Twitter would be required to disclose its financial information publicly), as they’re not ready to go public. He said at the time:
“We don’t want to be public until we have very predictable quarterly earnings growth. We’re not ready to be a public company for a couple years.”
Twitter apparently doesn’t want investors who are going to be activist in any way, wanting a position on the board or special rights.
(Stock market image via Shutterstock)