Twitter, Square, Living Social Want Investors To Stop Selling

In a startling change of pace, Twitter, Square and LivingSocial have taken steps from having investors sell stock on private exchanges, in an effort to keep the number of shareholders at bay, according to Bloomberg. According to two people close to the matter, Twitter has asked investors in its recent funding round to refrain from selling stock on exchanges like Second Market, SharePost and other private exchanges. Square has already done that, and LivingSocial is considering doing the same. “Board members and companies are getting more proactive, putting in procedures to manage the whole process,” said Hans Swildens to Bloomberg. Swildens, a managing director of Industry Ventures LLC. went on to say, “They want to keep the shares in the family. They don't want it to be the Wild West.” “It's in everyone's interest to let the company conduct an effective and organized offering of the shares, as opposed to having ad hoc leakage of the shares,” said Ted Hollifield, a partner at law firm Dorsey & Whitney LLP in Palo Alto, California to Bloomberg.