Twitter’s top executives sold off almost $50m personal stock holdings during November, with the CEO, Dick Costolo, shedding almost 50% of his holdings, and co-founder Ev Williams leading the charge by offloading $28.7m-worth of shares.
Twitter’s most famous face, Jack Dorsey, sold $2.1m worth of equities, along with Adam Baim, resident of global revenues, who sold $4m worth of shares. They were joined in the sale by Alexander Roetter, head of engineering, Vijaya Gadde, general counsel, and Kevin Weill, VP of product, who all sold around $1m-worth of stock each.
The US Securities and Exchange Commission confirmed the sales in official filings relating to November trading.
The firm told Forbes that “other than charitable donations, all of the executives’ stock sales were done in accordance with automatic trading plans put on file at least 90 days prior to the sales”.
That implies that the sale was not due to recent stock value slides and investor jitters over the firm’s performance.
Twitter’s share has price dropped by 17% in the last month, even though the firm reported Q3 revenue of $361m, up 114% year-over-year, with 23% growth in users of 13m to 284m.
However, analysis published by the firm showed that users were engaging with the service less, with average individual monthly timeline views – the key metric from many advertisers’ perspective – falling from 793 to 774 in the US. Globally, that figure slid 7%. Diminishing user interest in timelines means smaller revenues for the firm, scaring investors.
The share sale and price plunge follows the November downgrade by ratings agency Standard & Poors of Twitter stock to BB- – or junk – status. S&P said the downgrade would be reversed if the firm could broaden its revenue base in foreign markets, create new products, maintain its market position, continue to improve its profitability, and achieve positive and sustained discretionary cashflow in excess of $100m in 2016.
Twitter’s recently announced software development kit, Fabric, might address some of those demands. The firm will offer the app-building and analytics kit to developers in exchange for building Twitter into the back end of every app they write – meaning everyone that uses a smartphone will be using Twitter whether they choose to or not. Ad-generation functionality will be built into the suite, with some of that revenue shared with Twitter.
The price drop leaves Twitter shares essentially flat over the first year since its November IPO, with prices hovering at around $39.04c.
The firm has seen high turnover of some of its top staff in recent weeks. Two of its top engineers, its head of analytics and its VP of engineering, all resigned at the end of October. The next day, Twitter’s VP of product was demoted and replaced.
Costolo responded to accusations in September Paypal founder Peter Thiel, who told CNBC that the company was poorly run, remarking that there was “probably a lot of pot-smoking going on there” by tweeting: “Working my way through a giant bag of Doritos. I’ll catch up with you later.”
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