Twitter has ended pre-planned stock sales from its executives, Fortune’s Dan Primack reports.
Primack reports that in response to heavy criticism from CNBC’s Jim Cramer — and others — Twitter has ended the use of 10b5-1 stock sale plans, which allows executives to pre-plan stock sales at regular intervals.
Just last week, for example, Twitter founder Ev Williams sold $US24 million in stock as part of a 10b5-1 trading plan.
Primack’s report adds that it’s unclear if the company ended 10b5-1 plans for the company or simply didn’t renew them, but at any rate, there are no longer pre-planned stocks sales coming from Twitter executives.
Twitter declined to comment to Business Insider on the news.
In his report, Primack links to a February 9 post on TheStreet.com from Cramer, who slammed Twitter executives for what seemed like an onslaught of insider selling.
Cramer wrote in that post:
There’s no reason for a rich guy like Jack Dorsey, the chairman, to necessarily sell 75,360 shares of stock as we just learned, or for CEO Dick Costolo to unload another 125,000 shares, as was reported last week.
If I were on the board I would simply say, “Hey guys, could you give it a break for a while because you are now telling a good narrative about user growth and engagement and you are starting to get people excited again about the company and its stock and your selling makes them feel foolish.”
Last December, we spoke to a major shareholder in Twitter who also expressed outrage at the pre-planned stock sales. Here’s what our source said:
Selling stock speaks louder than any words. As the CEO, how do you look the employees in the eye when you are busy grabbing a lifeboat? He has lost their respect, and obviously the respect of the market. The people who work at Twitter know the potential, and they know he is an obstacle to achieving it. He shouldn’t be running the company anymore.
In afternoon trade on Wednesday, shares of Twitter were up about 1%.
Year-to-date, the stock is up about 44%.
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