Inside Twitter's Efforts to Keep Calm on the Post-IPO Roller Coaster

In just six short months, Twitter stock holders have been treated to the full, unpredictable Wall Street experience.

First the stock surged — big time — jumping from an IPO price of $26 per share in November to more than $70 per share by Christmas Eve. Then came concerns over user growth and profitability, paving the way for a stock decline that eliminated more than half the company's value in a three-month period. By the time Twitter employees were able to sell their shares, six months after IPO, stock price per share was hovering around $30.

Response has been predictably hysterical; The Atlantic went so far as to pen a eulogy for the microblogging service. But of the many people surprised by Twitter's recent stock market struggles, there was at least one person expecting it: CEO Dick Costolo.
We spoke with more than half a dozen former employees from a variety of levels and departments within the company — former executives down to the low- and mid-level. Many agreed to speak with us on condition of anonymity given the sensitive nature of the material.

According to multiple sources close to the company, Twitter's chief executive warned employees in the months following the company's IPO to prepare for ups and downs in the market. Costolo, who hosts company-wide "Tea Time" chats every other week where employees can ask him questions, at some point prepped Twitter employees that the company's initial stock surge wasn't permanent.
Preaching patience is far easier than practicing it, and Costolo's advice is likely being put to the test inside Twitter HQ. A number of Twitter executives, including Costolo, promised to hold onto their shares as a show of support for the company even though the six month lockup period is now over.

Others, however, including COO Ali Rowghani, sold shares last week in bulk. Former employees attempted to cash out as well, though technical issues and confusion over who was able to sell caused frustration among them. According to reports, Schwab was unable to process a handful of sale orders, resulting in angry former employees taking to a private Facebook thread to try to circumvent the issues.

Following the lockup fumble, the share price fell nearly 20%. A Twitter spokesperson did not comment on the lockup issue or on sentiment inside the company.

Stock fluctuation isn't rare for newly public companies. Lise Buyer, the founder of Class V Group, a firm that helps companies go to market, says that volatility is almost a given. "Emerging tech stocks always have, and always will be volatile," she told Mashable. "IPOs are the most risky sorts of equity investments as the companies they represent haven't been tested in the marketplace or had to function with the incremental burdens of public disclosures."

The public disclosure element seems to be hampering Twitter. Investors are balking at the company's user growth, which has been slower than expected despite a 25% increase year-over-year. It was widely thought that Twitter was aiming for 400 million users by the end of 2013, and the reality — 255 million as of March 31 — is a long way off.