Shares of Twitter (NYSE: TWTR) are under modest pressure today after co-founder Ev Williams said he planned on selling potentially upwards of 30% of his stake in the microblogging service. In order to pre-emptively justify his decision and get in front of any negative speculation as to his motivations, Williams wrote a short blog post on Medium, the blogging site he started after leaving Twitter.
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Williams notes that the "vast majority" of his assets are Twitter shares, which has long been the case and will continue to be the case. He says that he remains "optimistic about the future of the company," and is encouraged by recent changes that Twitter is making in an attempt to curb harassment and abuse on the service, which is one of Twitter's biggest challenges. Usage and engagement are also on the rise, and Twitter has recently added to its "senior staff," according to the post.
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Williams, who still serves on Twitter's board, has not sold any Twitter shares in a year and a half, but has recently filed a new 10b5-1 plan to sell off a chunk of his 5% stake. The plan commenced earlier this week, and Williams sold approximately 273,000 shares, worth just over $4 million, between Monday and Tuesday, according to a Form 4 filed yesterday.
The director makes it clear that his decision to unload a bit is personal: "It actually pains me to be selling at this point, but this sale is all about personal context, not company context." Williams intends to use the proceeds to invest in other ways (not including the public stock market) that he believes will "help build a smarter, more sustainable world." In other words, he's looking to diversify a bit, which surely any investor can appreciate. Williams also wants to continue with philanthropic efforts.
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In general, founders often have a disproportionate percentage of their net worth tied up in company stock. Most of the time, founders are happy to maintain those positions and work on growing the value of the companies they started, but Williams was ousted from Twitter's daily operations years ago after a power struggle with fellow co-founder Jack Dorsey.
For what it's worth, Williams' blog post likely succeeded in its intended effect. If investors saw nothing more than SEC filings and disclosures that one of Twitter's seminal co-founders was unloading nearly a third of his shares, they would very likely assume the worst and shares would probably be under heavier selling pressure than they are. Most of the time, investors have no idea if the decision is a personal one or because of some underlying internal issue at the company. Speculation on the underlying reason is almost always negative, and insiders very rarely issue public statements to clarify their rationale.
Twitter may still have many challenges ahead of it, but they aren't why Williams is selling.
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