Twitter to Close New Round of Funding Letting Employees Cash Out Stock
Twitter to Close New Round of Funding Letting Employees Cash Out Stock
Posted 07/20/2011 at 2:55pm
| by Ryan Whitwam
2
Comments
Print
One of the hazards of signing up with a start up is that the stock they use to lure employees in usually can’t be cashed out until the company allows it. That’s been the case with Twitter for years now, and both employees and investors are getting antsy. But the social service’s new round of funding, reported to be around $800 million, will include $400 million just for cashing out stock options.
The transaction is expected to be done in the next two weeks. At that time, those with stakes in the company will have the option to sell some or all of their stock back. But maybe that won’t be the best idea. Twitter is definitely on a tear. The proposed round of funding will value the company at over $8 billion.
With the founders of Twitter taking their leave, this will be a critical time for the company to prove that it can find a viable business model. Twitter currently pulls in about $200 million a year in revenue, a relatively small sum. Do you think Twitter investors should get out now, or keep riding that micro-blogging train all the way to the bank?
More like this
2
Comments
Comments are closed on this article
wcj786
July 20, 2011 at 7:38pm
If I were an investor, I would AT LEAST sell enough to get my initial stake back. At that point, the stock I still had could be considered "play money". I would be guaranteed to break even, at worst, so could then afford to have a wait and see attitude. I would have to look seriously at any potential competitor to evaluate whether to keep the rest in Twitter or sell it all.
I look at this as a business decision. I don't use Twitter and never have, so I don't have any emotional attachment to it at all. If you sold all your stock right now, you would still profit, even if it the value went up in the future. If you held your stock and the value went down, you might not even have the ability to sell your stock, as it is locked in to the company allowing you the opportunity to sell.
thechipper
July 22, 2011 at 8:32am
When we look at Twitter's income we have to remember there are in essence two sets of books. $200 mil reported. What about all the coprporate and celebrity cash incentives directed their way.
That aside Twitter is a gravy train. They aren't going anywhere any time soon since the social network boom. It's obviously an incredible investment still considering their recent projections that they will reach 1billion users faster than they initially anticipated.
Connect with MaximumPC
Featured Content
The gang discusses the GTX 690, Trinity, Ivy Bridge, Amazon, big-box stores, MMOs,...
This month's issue
Feature
Build a PC On Any Budget
Feature
Cloud Services Showdown
How-To
Encrypt Your External Drive
Build It
Upgrade an X58 Rig
Most Commented Articles
Latest Max PC Tweets
- maximumpc: Original RickRoll Video Returns to YouTube After 24-Hour Copyright Hiatus http://t.co/MaH9Sxyy2 days 4 hours ago
- maximumpc: Corsair has decided not to go forward with its $78 million IPO, citing weak equity market conditions http://t.co/A5a4DAzj2 days 4 hours ago
- maximumpc: Want to work at Maximum PC? Our Online Managing Editor, Alex, is moving away, so we need a new one. http://t.co/9Z7JCh0E4 days 2 hours ago
