WSJ: ‘As Lockup Expires, Twitter Holders Fly the Coop’
1twit
noun \ˈtwit\ : a stupid or foolish person.
In addition to the general definition of “twit” (above), I have a special case: momentum investors who bought Twitter’s stock and have now lost more than half their money this year (see also, “chump”).
Yesterday’s not-so-randomly timed, 18% plunge comes six months to the day after the company’s IPO.
The explanation: that’s when the “lockup” — imposed by the securities firms that sold the Twitter initial public offering — expired, freeing Twitter’s early investors and employees to sell for the first time.
Will there be a bounce?
It’s worth noting that Facebook’s shares bottomed around the same time following its IPO, and rallied (very) nicely thereafter.
In Twitter’s case, however, it’s still arguable (at least to me) whether a company with $800 million in sales — however fast-growing — is worth $18 billion (down from over $40 billion).
