Twitter Inc (TWTR)’s Long-Term Prospects in Doubt as CEO Offloads Stakes

Twitter Inc (NYSE:TWTR)’s long-term prospects seem to be a point of concern even for people at the helm after the company’s CEO, Dick Costolo, opted to unload stakes through his trust. The company has been facing immense scrutiny from Wall Street this year seen by the stock plummeting by 45% as competition continues to hit fever pitch in the space.

Costolo Transactions

The Richard Costolo 2001 Living trust and the Loran Costolo 2001 living Trust are reported to have offloaded a total of 141,730 shares for $5.32 million on December 12. The two trusts now no longer hold any stakes in the company although Costolo continues to own 36,028 shares directly, with an additional 509,828 in an unvested restricted stock.

The CEO is reported to have held the shares from the time Twitter Inc (NYSE:TWTR) went public in 2013 as a sign of confidence to other investors that the company was on the right track. Twitter has been working tirelessly this year to boost investor confidence in the wake of increased concerns that the company had stagnated amidst fears competition from Facebook on the social platform.

Twitter’s struggles

Costolo now remains with 8.52 million options in Twitter Inc (NYSE:TWTR) thought to be worth $284.6 million made of 4.03 million that were granted in 2009 at 43 cents and an additional 3 million granted at $1.83 apiece. Twitter has been pounded with concerns over its ability to successfully monetize its audience with its market cap hovering at half the value it had when it went public.

Twitter has also been struggling on the active monthly user’s front having been surpassed by Instagram, which currently boost of over 300 million active users. On the advertising front, the company has also not been performing to standard as Google Inc (NASDAQ:GOOGL) and Facebook (NASDAQ:FB) continue to control a bigger share of the entire market share.

Despite the ongoing uncertainties and concerns, Twitter continues to be rated favorably by JMP securities that has a market outperform rating with a $49 share price target.