Twitter Inc (NYSE:TWTR) share price has jumped as its management has stopped liquidating the shares. The company ended a plan whereby top executives were allowed to sell company’s shares at regular intervals. The move was announced after the social media giant came under criticism, especially from CNBC’s Jim Cramer for insider share sales. The selling has been affecting the company’s stock price.
Have technical analyst identified a strong wedge in TWTR?
The share sale plan as called 10b5-1 is used by many publicly-traded firms to let board members and executives sell a predetermined number of company’s stock at a predetermined time. The plan tends to eliminate the appearance of share sale being supported by inside information.
At Twitter, the plan prompted CEO Dick Costolo offloading over $8.5 million worth of Twitter’s stock via sales in months of January and February. The sale was also followed by Chairman and Co-founder Jack Dorsey through a pair of January dispositions. Adam Bain, who is President of ‘global revenue and partnership’ division of Twitter sold $1.8 million worth of stock in January. The figures indicate that a large number of shares were sold in the month of January by the management itself.
It accounts for active insider selling in 4Q2014, forcing Jim Cramer to comment on the matter. He wrote in a memo to the Board that someone should recommend that there be a suspension on selling Twitter stock for some time, maybe six months or a year, to indicate that confidence in the company. He further wrote that if he were on the board he would simply state that selling could be given a halt for a while. It is to encourage people to start getting thrilled about the company’s and its stock once again. The selling by management makes them feel foolish. As of now, the plan is no longer valid for Twitter’s senior management.