The Real Reason Twitter Employees Are Leaving—So They Can Sell Their Stock

People are leaving Twitter—executives, engineers—this happens at large companies with more than 700 employees. We notice, as does every other tech blog. Nicholas Carlson at Business Insider put forth a some theories based on a single interview with a former employee that range from the engineers not being rockstar enough to jealousy over a party in Las Vegas to which only some employees were invited.

But there is a much simpler explanation. Twitter is very restrictive about when employees can sell shares. It just completed an $800 million financing round in September, half of which went to employees selling up to 20 percent of their shares. While that did serve as a release valve, the offering is over. If you are a longtime Twitter employee sitting on a bunch of fully-vested shares that you want to unload, your best bet might be to quit and try to sell them on private secondary markets. Twitter has less control over what former employees can do with their shares, although it frowns on shares trading on the secondary markets (instead, in the past, Twitter has directed these sales to approved funds run by Silicon Valley investors like Chris Sacca and Ron Conway).

Of course, everyone’s situation is different. Employees who believe that Twitter’s best days are still ahead of it might prefer sticking around and holding onto their shares.

Another contributing factor to the departures is that there’s been a changing of the guard, with founder Jack Dorsey coming back earlier this year to take over product development and other functions, such as marketing. Meanwhile the other founders, Evan Williams and Biz Stone, left to pursue other projects. The aftermath of that transition may still be playing out.

Overall, though, while some of the exits may be high-profile, Twitter is not suffering from a mass exodus. After all, it is still hiring and increasing headcount.