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Twitter Reportedly Prevent Shareholders from Selling more than 20% of Stock

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While the huge hype around Facebook's forthcoming IPO illustrates just how valuable and wealthy successful internet start ups could become if they hit Wall Street, it seems that it's not the dream for every online company. CNN Money has obtained emails from Twitter that detail a policy that Twitter shareholders are not to sell more than 20 per cent of their shares so that the company remains privately owned.

CNN Money state that an email from Twitter CEO Dick Costolo stated that Twitter should keep under the 500 shareholder rule in order to remain a private company because "When companies have more than 500 shareholders owning one class of equity shares, the SEC requires the business to begin disclosing its financial results. Companies aren't required to go public at that point, but most choose to.”

Costolo's email was reportedly sent in response to an email sent to all Twitter employees by Evan Weaver, former senior technical engineer, on his resignation, which CNN Money say was directly caused by Twitter's share policy, which they say "has caused dissent in Twitter's ranks."

It's interesting that Twitter do not want to go public and follow in Facebook's footsteps - it's clear that they have another type of business plan in mind, and it's early days yet for the network in terms of the amount of revenue they generate, as it was recently reported that Apple makes more in a day than Twitter does in a year. 

But that's not to say that Twitter is not a force to be reckoned with, with shares that could be valuable to shareholders who may indeed want to sell - Twitter was reportedly valued at $8.4 billion following the announcement of funding for the site in August 2011. It will be interesting to see if any more departures come from Twitter as a result of this shareholder policy, but at any rate, it's unlikely that we'll see Twitter announcing its IPO anytime soon.

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