Twitter has reported its shares to have had crushed after a lackluster 2Q earnings. However, once again there’s a golden opportunity for investors as they are thinking to buy as the stock now trading near all-time lows and closing in on its IPO price of US$ 26.
Previously, there were three main reasons why investors were instructed to avoid the stock. But there’s one more reason which could be highlighted: insiders are dumping boatloads of shares.
According to SEC filings, Twitter’s insiders sold approximately US$ 103 million in shares over the past three months, US$ 31.6 million in July, US$ 28.5 million in June while US$ 42.8 million in May. CEO Evan Williams was referred to the biggest seller during all that time as he sold around US$ 93.6 million in shares. But a few months later, Costolo set up a plan to sell shares through his family trust. By November, the trust had dumped 50% of its shares. Costolo has sold another US$ 37.3 million in shares since then.
During Costolo’s last year as Twitter’s CEO, he introduced a glut of new features i.e. Instant Timelines, group chats, video editing tools, logged-out experiences, and e-commerce initiatives. Unfortunately, Dorsey told investors during last quarter’s conference call that none of those had a meaningful impact on growing our audience or participation. Also, last Q, Twitter’s year-over-year monthly active user (MAU) growth also hit its lowest point since the company got revealed to public.
The future does not apparently seem bright for Twitter, but there are potential catalysts on the horizon. Project Lightning will be curating event-based content into news stories with tweeted photos and videos. According to Pew Research Center, nearly half of Twitter users under 35 rely on the site as a primary news source.