Twitter's "lockup" period — the time after the company goes public where investors are still unable to sell their shares — has expired, sending the stock tumbling to new lows.
Shares of Twitter were down 12% Tuesday morning after the lockup expired, a new low of around $34 and well down from its highs of more than $70 shortly after the company went public. Twitter priced its initial public offering at $26, but the company has had trouble convincing investors since going public that it is growing as quickly as other advertising-driven services like Facebook.
A stock drop isn't necessarily a surprise, as the market is suddenly flooded with new shares of Twitter that are available for sale. But many of Twitter's executives have said they have no intention of selling shares, and Twitter has said it has no intention of pursuing a secondary offering. "Many of our largest insiders and early investors have indicated that they have a long-term belief in the company and are taking a long-term view of the stock," CFO Mike Gupta said on the earnings call. "As such, they do not currently have any plans to sell stock immediately upon lockup expiration."
That still doesn't stop other investors and Twitter employees from selling some of the roughly 470 million shares that are now available for sale. Around 13 million Twitter shares change hands during normal trading activity, but trading volume had hit more than 60 million before noon, according to Yahoo Finance. After Twitter's stock drop today, the company is worth less than $20 billion for the first time since going public.