This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Twitter Insider Sell-off Undermines Social Media Valuations: StockTwits

Stocks in this article: TWTR YELP LNKD FB

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.

"@deltaStrikejj: fact that $YELP is down 12% and $LNKD -6% says this $TWTR collapse is way more than just a share lock up hitting mrkt" ? Tracey Ryniec (@TraceyRyniec) May. 6 at 03:29 PM

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 PM

Selling 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 PM

Many 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

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs