NEW YORK (TheStreet) -- Twitter (TWTR) unlocked the gates and social media investors ran for the exits. Today is the first day that many Twitter insiders have been permitted to sell their shares. And sell, sell, sell they did. The stock price dropped nearly 18% today.
On StockTwits.com, investors blamed Twitter insider selling for sparking a broad sell-off in social media stocks.
Twitter, Yelp (YELP) and LinkedIn (LNKD) each posted significant losses at the end of trading Tuesday. Even Facebook (FB), widely considered the most proven social media stock, fell more than 4%.
Tech stocks not doing so hot $TWTR down 16.59%, $GRPN down 2.47%, $YELP down 12.59%, $LNKD down 6.2%...Sell in May... whats that old adage? -- Options Elite (@OptionsElite) May. 6 at 03:29 PMSelling restrictions expired on 480 million shares held by Twitter insiders Tuesday, enabling early investors and employees to cash out of shares that had fallen nearly 50% since February all-time highs. Investors figured that if Twitter insiders didn't think the stock was worth its 155 times expected 2015 earnings multiple, then they probably shouldn't bank on the micro-blogging company living up to the hype either.
$TWTR well it's nice to see the conviction of insiders for the long term development of twitter .......... -- BiopharmaPro (@BiopharmaPro) May. 6 at 03:25 PMMany took the argument further to question the valuation of all social media stocks. If Twitter wasn't worth 155 times earnings, then why should anyone hold any social media stock with multiples in the high double digits?
$LNKD I would short this to 0. $TWTR and $YELP as well. When you don't sell a product, you get this outcome. Bubbles everywhere bursting -- The NOTORIOUS kiksbutt (@kiksbutt) May. 6 at 03:28 PM
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