Twitter Exodus Possibly Linked to Stock Restrictions

Are Twitter employees leaving the social media giant to sell their highly valued private stock?

The departures have coincided with an influx of employment in the past year as well as a shuffling in management. In late 2010, Twitter co-founder Evan Williams handed the CEO title to then-COO Dick Costolo. The change at the top was followed by the return of former CEO and Twitter co-founder Jack Dorsey in March 2011 as executive chairman.

Amid these changes, top engineers and executives, including Vice President of engineering Mike Abbott and Vice President of Consumer Marketing Pam Kramer, have been jumping ship.

In late November, former Twitter engineer Adrien Cahen expressed his ire towards the company in a blog-post where he wrote, “There are plenty of turf wars, and a lot of strong personalities with conflicting views as to what the product is, how it works, and what it means. Eventually, the kool-aid turned a bit sour for me.”

A recent TechCrunch article speculated that recent departures could be rooted in Twitter’s restrictive policies on selling company shares and the employee’s desire to cash in.

Are the employees seeing the beginning of a collapse in Twitter and looking more towards short-term gain?

Ari Zoldan, founder and CEO of Quantum Networks and frequent tech analyst for FoxNews and other media outlets, does not see a downturn for Twitter anytime in the near future.

“Twitter is a social media company that launched at the right time, at the right place,” Zoldan said. “At this point I don’t see a number two or even a number three.”

While Zoldan does see is a company that may not be paying enough to keep their best talent on board.

Employees feeling deserved of a higher pay rate, coupled with the restrictive policies on unloading stock to secondary markets might be giving them the push to quit.

Zoldan’s solution would be for Twitter to make the company a place where people would want to stay, even if that means offering as much flexibility with employee stock to benefit the happiness of the staff and their pockets.

Dan Wesley, CEO of Creditloan.com agrees that Twitter’s problem has a relation between the satisfaction of employment and the allure of quick cash.

“The Twitter corporate culture is undergoing transformation with Twitter’s new leadership team, Wesley said. “They are in a critical stretch. They need to start making money.”

Wesley believes that the departures are a very telling sign as to the state of the company.

“So why not cash out and move on?” Wesley said. “Bottom-line is that the mass exodus is a telling tale that folks have stopped buying in and are cashing out.”

Wesley pointed out that Twitter is not alone in this problem; Facebook has had similar dilemma involving rising stock and fleeing employees as well.

Going public is an option that may alleviate the problems faced with employee stock options, a move, widely speculated, that Facebook will make in 2012.

“It will certainly create a better landscape for both the management and employees,” Zoldan said. The added value of being a public company will give the employees more transparency and a clearer understanding of their worth, while creating flexibility and liquidity in the markets.”

Zoldan though, does not see this as a reality for Twitter in the coming year.

“In terms of when an offering will be placed on the market I wouldn’t be surprised if we were looking at anywhere between 12 to 18 months,” Zoldan said.

What needs to be worked out, according to Zoldan, is the timing and pricing of the initial public offering as well as a clearer understanding of where Twitter will make its money in the short and long term.

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