If you find yourself at Alta CA this weekend, try to get one of your Twitter employee friends to pick up the tab. Chances are they'll have a little cash to burn soon.
The first batch of Twitter workers will be able to sell their stock in the company starting this Saturday—and that has the potential not only to drive the price lower in the short term, but to signal internal confidence in the company's long-term fate.
9.9 million shares will be unlocked by agreements that bar employees from selling their shares close to the IPO. According to the Wall Street Journal, most of that stock is held by non-executive employees, and is intended as a way for them to help defray income taxes expense from vesting shares. The batch makes up 1.8% of all existing shares—which sounds small, but can have a big impact on supply when opened up simultaneously.
This break out is just a small foreshadowing—on May 6th the full amount of Twitter stock owned by employees, over 474 million shares, will be able to go on the market. If this weekend's batch leads to a raft of Twitter employees selling, it could presage an even larger exit in a few months. When Facebook's first stock lockup expired in August 2012, its price dropped 6.4%
As the Journal noted, Twitter's stock has taken a beating recently, after a soft earning report sent the stock tumbling as much as 24% last week. After a strong IPO, Twitter's price hit a peak of $74.73 in December, and stands at $57.44 today.