Market News Call

Important developments: Twitter Inc (NYSE:TWTR), SunPower Corporation (NASDAQ:SPWR)

A small pile of Twitter Inc(NYSE:TWTR) shares could be freed to the market this week as agreements that barred employees from selling a portion of their shares after the IPO expire.

On Saturday, Twitter employees may elect to sell as much as 9.9 million shares. The expiration is the first of two opportunities company employees will get to cash out.

Should Investors Buy TWTR After Recent Development? Find Out Here

Lockup expirations typically attract short sellers and can significantly sink stock prices – as was witnessed when the sales bans at Facebook began to lift. Shares at the social networking giant tumbled 6.4% to a new low when the first batch of shares became eligible for sale in August 2012.

But Twitter took a different tact from Facebook, much like the way its relatively smooth IPO had taken a decidedly distinct approach.

This first chunk of shares available for sale is small. It represents just 1.8% of outstanding shares and is mainly to give non-executive employees a way to settle income tax expenses from vesting shares. In comparison, Facebook freed more than 271 million shares — or nearly 13% of those outstanding, in the first lockup. Four more expirations for Facebook shareholders came up over the next nine months, releasing 1.4 billion more shares into the market place. The biggest release came 181 days after the IPO, as will Twitter’s.

Come May 6, Twitter’s executives, directors and owners with big stakes in the company that include early backers such as Benchmark Capital, Union Square Ventures and Rizvi Traverse could begin to unleash some 545.4 million Twitter shares into the market. That’s when the 180-day lockup period that had prevented them from selling their shares will end. No insiders were allowed to sell shares in Twitter’s IPO, unlike Facebook’s offering in which more than half of the shares sold came from early investors and executives.

SunPower Corporation(NASDAQ:SPWR) pushes higher, rallying from early weakness after Q4 earnings beat estimates but Q1 revenue guidance came in soft, as analysts move in to praise the company.The improved results were due to “solid execution, with shipment, revenue and gross margin all exceeding guidance and better than consensus,” RBC analysts say as they raise their price target on the stock to $35 from $30.SPWR “is well positioned for profitable growth in rooftop sales and leasing, despite the normalizing margins for new utility-scale projects in North America,” Credit Suisse says.

 



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  1. Mr4Gov February 13, 2014 Reply

    Locked-out employees would be crazy not to dump and run at these highly inflated prices. Can’t wait to see how this dilution drives down the stock price these next few days. I might buy when it falls back to earth: $20 or $25/share.

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