May 6 (Reuters) - Shares of Twitter Inc were set to open 7 percent lower on Tuesday after the expiration of a six-month “lock-up” period that had restricted the sale of roughly 82 percent of the company’s outstanding equity.
A likely sell-off would place even greater pressure on a stock that has been trading at all-time lows since April 29, when Twitter’s quarterly results showed sagging usage metrics.
Twitter has comfortably hit its revenue targets in the two quarters since it went public on Nov. 7.
But rapidly mounting concerns about user growth and engagement levels has wiped out more than $18 billion of market value - half of the company’s market capitalization.
Twitter’s co-founders, Jack Dorsey and Evan Williams, and Chief Executive Dick Costolo said in April that they did not plan to sell their shares after the restrictions were lifted.
Venture capital firm Benchmark, which holds a roughly 6 percent stake, has also said it would not sell its stake.
But other major shareholders could see an opportunity to cash out, given that none of Twitter’s insiders sold their shares during the IPO.
Many tech companies, including Twitter, have a share lock-up clause to prevent holders from flooding the market as soon as the company goes public.
Twitter has already allowed one batch of shares to be sold in February, but that lockup governed only about 10 million shares, most of which were held by non-executive employees.
Twitter shares were trading at $36 before the bell on Tuesday. (Reporting by Gerry Shih in San Francisco and Supantha Mukherjee in Bangalore; Editing by Savio D‘Souza)