Twitter Investors, Including Employees, Can Only Sell 20% of Their Stock [REPORT]

In a move designed to forestall an IPO for as long as possible,Twitter has a rule barring any investor, including employees, from selling more than 20% of their stock, according to a report.

Twitter initiated the rule about a year ago, but it hadn’t been made public, according to CNNMoney. The guideline is somewhat controversial within the company and allegedly prompted Senior Technical Engineer Evan Weaver to resign last August.

According to the article, Weaver’s departure prompted an explanatory email to staffers from CEO Dick Costolo. The email outlined Twitter’s reason behind the policy: To keep to the SEC-dictated limit of under 500 investors. Beyond that number, Twitter would have to go public. “We don’t want to be public until we have very predictable quarterly earnings growth,” Costolo wrote in his August email, according to the article. “We’re not ready to be a public company for a couple years… There is one reasonable way to do this: Let everybody with vested common stock sell only some fraction of their shares,” Costolo added.

Twitter reps could not be reached for comment on the report.

Costolo’s stance on going public mirrors his other recent public statements. Like other social media firms, including, for a time, Facebook, Twitter appears to be holding off an IPO as a way of limiting outsider investors’ influence. That approach has hardly dimmed enthusiasm for the stock, though. Last March, Twitter’s valuationhit $7.7 billion on Sharespost, which trades shares on the secondary market.

Limiting shareholders means catering to deep-pocketed investors, including Saudi Prince Alwaleed bin Talal, who sank $300 million into the company in December. Like Facebook, Twitter has also stopped giving out stock to employees instead offering them restricted stock units (RSUs), which can only be converted to actual shares after an IPO or a corporate buyout, according to the report.

Image courtesy of Flickr, eldh

15:52 by Robert dawne · 0

LinkedIn Revenue Surges Over Analyst Expectations; Stock Jumps

LinkedIn has announced that revenue has more than doubled in the last quarter and they’ve increased their 2012 revenues, and the stock has jumped accordingly.  The social network reported $167.7 million in revenue for the fourth quarter, beating the average analyst estimate of $159.8 million in the quarter.  The good news also comes at a time where people are piling into social media stocks, with Zynga hovering around 30% higher than it’s IPO price and LinkedIn now almost 200% over it’s $45 IPO price, placing it’s market cap at $8.67 billion.
The non-GAAP net income for the quarter was $13.3 million which represents an increase in profitability.  For the fourth quarter of 2010 the net income was $5.2 million.  LinkedIn earns it’s revenue from a variety of products.  They have Hiring Solutions, Marketing Solutions and Premium Subscriptions.  Looking at the fiscal report, we can see that revenue increased in all three areas.  A promising factor here is also that they are a diversified company: they are increasing revenue on all fronts.
Hiring solutions, which are their tools which help recruiters find solid candidates using the network, increased over Q42010 by 136% to $84.9 million.  Marketing solutions increased 77% to $49.5 million.  Revenue from Premium subscriptions increased 87% to $33.3 million.
This is incredible news for LinkedIn but also for the social sector as a whole.  It’s clear that revenue is a real possibility, and LinkedIn is demonstrating that.  Facebook’s IPO is gaining steam and recently broke the $100B valuation mark, and with news like this investors are all going to believe in the power of the network.  The one factor here is that LinkedIn is a professional network who have excelled at keeping their user base professional and keeping distractions out of the way — it’s a great place to find quality people.  LinkedIn also focuses on hiring products that they are explicitly selling to companies which is not part of Facebook’s arsenal at this point.
However, Facebook has Facebook credits in the wings, and if they’re able to launch that it could become a huge force on the web for e-commerce.  That may be a driving force that could help Facebook increase their revenues in place of having a specific product.
LinkedIn has also announced it hit 150 million members and is continuing to grow at a staggering pace.

16:00 by Robert dawne · 0