Twitter Hit Hard As Lock Up Ends; Two Insider Sales

Tuesday marks 180 days since Twitter TWTR shares first became available to the public. Subsequently, the company’s lock up period is over, meaning insiders and early investors can begin selling shares.

Insider ownership currently makes up 4.3 percent of the float for the 23 billion dollar company.

On Monday night two insiders, Christopher Fry, VP of Engineering and Vijaya Gadde, General counsel sold shares at 5:56 am and 6:21 am, respectively. Although the quantities sold are small (19,568 shares for Fry and 3,914 shares for Vijaya), traders are not liking the news. Twitter has been sharply selling off in the premarket after a small drop in Monday’s after hours trading.

Related: Short Seller Climb Aboard The Twitter Train

According to Bloomberg, venture capital firm Benchmark will not be selling any stock in the company, despite owning more than 200 million shares. Bloomberg also reports that Chris Sacca who controls 15 percent of shares, founder Jack Dorsey, and CEO Dick Costolo will also be holding on to their shares. These declarations may be in part to ensure investor confidence; Mark Zuckerberg made a similar announcement when Facebook was nearing the end of its lock up period

Regardless, it will be interesting to see if other insiders or major stakeholders join Fry and Vijaya to sell part of their stake.

As of Monday’s close, shares are down 48.15 percent from the $74.73 peak made in late December. This downward move is likely to put pressure on some stakeholders who want to manage their risk and are nervous about the issue’s bearish trend. Shares were also hit hard on April 29 when Twitter announced its first quarter earnings. Although revenue and EPS figures were higher than the analyst consensus, investors were disappointed that the company failed to post a profit.

At last check, shares were down 7.02 percent in the premarket to $38.75.