Ev Williams, Twitter’s co-founder, has disclosed that he is liquidating a third of his $630 million shareholding in the microblogging platform. The initial tranche that has already been sold off earned Wlliams $3 million after tax and was disclosed in a securities filing on Wednesday. The news that Twitter’s largest individual shareholder and board member was not well received in the market and it sent the stock falling by 1% on Thursday.
After the disclosure of the sale was made, Williams made it clear that the move was out of personal reasons and had nothing to do with the company’s performance.
“After a year and a half of no selling, I have filed a new 10b5-1 plan to liquidate a minority of my TWTR over the next year … this sale is all about personal context, not company context,” Williams wrote in a blog post on Medium.
One of William’s personal reasons for selling his stake in Twitter is to raise money for other investments. Besides investing, Williams will also allocate some of the money raised to charity donations and political causes. If the plan to sell the one-third stake were to be complete today at the current stock price, Williams would get a net of approximately $125 million post-tax. Williams’ investment vehicle of choice is Obvious Ventures where he also doubles up as the limited partner with the largest stake.
Despite the explanation he gave, the sale raised eyebrows as the microblogging platform has recently been experiencing a lot of turbulence. In the last one year, Twitter’s stock has declined by 14% while it has fallen by 72% in the last two years. In those two years, William’s stake has shrunk by over $1 billion from $2.9 billion to $1.3 billion currently. When Twitter first went public in October 2013, the value of Williams’ fortune stood at $3.5 billion.
Part of Twitter’s struggles have to do with slowing user growth. The social media platform has also encountered negative publicity over claims that it has not done enough to combat harassment. Twitter also has a talent problem as it keeps losing senior executives. Last year, one of the high-profile departures was that of Adam Bain, who was the company’s chief operating officer then.
Besides Williams, one of the other major investors in Twitter who has sold a significant number of shares is Chris Sacca. In March, he disclosed that he had sold his entire Twitter stake.