
Twitter's Paper Millionaires May Want to Get Out ASAP - _pius
http://www.wired.com/business/2014/01/twitters-paper-millionaires-may-want-to-get-out/?cid=co16909414
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suprgeek
The Writer of this article needs to perform some fact checking. There are
nowhere near 1600 Millionaires in Twitter - closer to 600 to 700 is the number
most common heard in their offices.

A lot of those are not at the end of their vesting periods either so "Getting
Out" is a meaningless term, not feasible for the next 2-3 quarters.

The quality of Wired articles is really plumbing the depths these days.

~~~
prostoalex
TWTR's fluctuation so far has been $38.80 - $74.73.

Wouldn't you expect the fluctuation in millionaire numbers to follow that, and
count of millionaires to be on the high side during the stock's ups?

At peak $74.73 price it only takes 13,382 shares to go over $1 mil, which for
company with 555,200,000 shares outstanding is 0.002% grant, generous, but not
an unheard-of amount.

~~~
product50
By the same logic, Google's stock is at $1100 meaning anyone with 900 shares
of Google is also a millionaire. Now I don't know about you, but I have some
software engineer friends at Google and, first hand information from them,
they are NOT millionaires. Typically, companies know how much they are worth
(or will be worth post IPO) and distribute stock to employees accordingly.
Exception is of course if you join the company in the early rounds of funding
(when typically the valuation of the company is low so you have to compensate
with more stocks).

Twitter almost doubled its headcount in the last year itself - I am not sure
if they were paying 10s of thousands shares to newly joined employees
especially when their last valuation (before IPO) valued Twitter at $10B or
so.

~~~
prostoalex
Some people have been offered that, and others have not.

[http://www.quora.com/Salaries/I-was-offered-15000-RSUs-as-
pa...](http://www.quora.com/Salaries/I-was-offered-15000-RSUs-as-part-of-my-
Twitter-offer-a-year-ago-I-didnt-take-it-Does-that-mean-they-wouldve-been-
worth-600-000-today-ignoring-tax)

------
neals
I think twitter is one of the most promising "social media" (are we still
calling it that?) stocks out there. Where Facebook's main audience (teenagers)
is jumping ship, I think Twitter has too many of celebrities and famous people
"locked-in" to their platform for a comparable exodus to take place.

Added to that, media like Television have been integrating Twitter into their
systems ( live tweeting, tweet voting etc. ).

Looks promising enough to me.

~~~
mrweasel
Twitter, just like Facebook, is grossly overpriced/overvalued. The number of
users for both are impressive to say the least, but neither is making a profit
that can justify the value of the companies. Both companies seem to have a
business plan straight out of the dotcom era, that is: "let's slap some ads on
and see if that works".

At this point I think we have seem what will be the downfall of Facebook,
teenagers not thinking it's cool. As for Twitter, it might be a US vs. Europe
thing, but I honestly don't know more that a handful of people using Twitter
and all of them still have Facebook as well. Twitter is a broadcast platform
nothing more. That works great if you want to follow celebrities, but if the
celebrities are the reason for using Twitter for many, then Twitter is going
to be much more vulnerable to an exodus that Facebook. Facebook users won't
move to a new platform before all their friends have moved as well. With
Twitter you just need to move the top celebrities and their followers will
leave as quickly as they signed up.

In my mind Twitter has an impressive broadcast platform, but they aren't
making the money to justify the value of the company and have no clear way to
do so in the future. Someone is going to have to foot the bill at some point.
No one is going to pay a subscription fee for neither Twitter, nor Facebook.
That leaves ads or having companies and celebrities paying for their posts.

Twitter has a funny way of working like an little bubble. People on Twitter
believe that everything revolves around Twitter, while the rest of the world
are at most vaguely aware that it exists.

~~~
neals
I considered this when I typed my little comment.

I would like to respond to your insightful comment about celeberties moving
over to another platform.

I think this is just not going to happen very soon. I would like to compare a
twitter account a lot more to a e-mail address. Celeberties and brands ( lets
not forgot about brands ) have worked very hard (or waited rather long, at
least) to get their millions of followers and their @username signature.

I think this is what causes a kind of lock-in: moving away would mean that
your messages would get a lot less attention and having to wait a long time to
be back at a million followers AND abandoning your @username, which many
people have come to know you by.

Now I don't know anybody by their Facebook profile URL, while I know many
celebrity @usernames, even though I don't use Twitter. Finding somebody on
Facebook is the same as finding anybody on any profile site. You have to use
the search, there is no added value. Twitter has a very strong weapon here
with their @username offering.

Also, I don't think a new platform could offer enough extra's for them to take
the step. Another platform would have to offer something so special that it
justifies leaving a million followers behind. I don't see this happening
because the strength of Twitter is its LACK of features. You type something
and move on. You see how that cancels out any newcomer?

I'm from Europe, and I see a lot of people using Twitter. If I look at my
Facebook stream, a lot of the status-updates are coming in through Twitter, or
at least apps that post to multiple networks.

Also, I think that I should add that both you and me are commenting from own
experience, neither of us is saying anything based on market research. So
let's not keep doing this :)

~~~
mrweasel
I think you're right about the not abandoning @usernames, but new celebrities
are showing up very year and they are not yet tied to any platform.

And yes, let's not keep doing this :-) Market research would be exciting to
see though.

~~~
aaronpeck
I think if you just look at the shear number of followers mainstream (i.e.
CNN) and alt (Vice) news accounts have or the same for financial news
accounts, it becomes pretty obvious that a huge number of Twitter users rely
on it for REALLY important information. I don't look at customized Feedly or
Flipboard type aggregators anymore, and why would I? The information I get
from who I follow on Twitter is available sooner, is summarized and usually
has the option to dive deeper. While we can see that celebrities have huge
follower counts, because their accounts are often water down by third parties,
it seems logical that people follow them as a way to just say they 'like' them
and not as a source of important information.

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joezydeco
Am I the only one that can't read Wired articles on an iOS device (g4 iPod)
anymore? Why the heck is this page constantly rerendering?

------
gaius
You would want to do this at any company. If it tanks, you lose both your job
and your nest egg. Diversification is the name of the game.

~~~
joshmlewis
The issue of getting out is a pointless term for most of the employees right
now. They won't be fully vested for at least 6mos to a year.

~~~
gaius
The lesson of the first dotcom bubble is that making money is easy, holding
onto it is hard. I actually know a few ex-billionaires... That never saw
actual dollars. Now they are working schmucks like anyone else.

------
aaronpeck
What is the value of code that can cause revolutions, sway financial markets,
and spread P2P information across the world instantly? How can any analyst
know when there's no comp? Answer: they can't. I'd sell the hell out of $TWTR
right now because the analysts are going to fill the news cycle with
negetivity and the smart money is slobbering over short potential. Once it
finds a bottom however, I'd double down on it and get ready to wake up daily
to a green ticker.

------
option_greek
Why can't they just write some long term options and safe guard their value.
Or may be they are already doing it and wired may just have ignored it.

~~~
roel_v
You realize you would need a counter party for those, right? I'm not in
finance, but maybe somebody who is can guesstimate the size of the long term
options market for tech companies? I'd say it must be minuscule, how can you
build a profitable strategy off something with that volatility without
devolving into straight gambling?

~~~
Irishsteve
2016 options
[https://www.google.com/finance/option_chain?q=NYSE%3ATWTR&ei...](https://www.google.com/finance/option_chain?q=NYSE%3ATWTR&ei=OIHRUpCeELHFwAPR1wE)

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inthewoods
I'd like to thank Wired for the buy signal on Twitter. :)

------
pstuart
Isn't that the only way for dotcom wealth preservation?

------
MarkPNeyer
what exactly is a "paper millionaire?"

~~~
n0nick
Someone whose stock property ("paper") can be valued as > $1M, i.e. If they
sell their TWTR stocks now they will be 'actual' cash millionaires.

~~~
hkmurakami
I think liquidity is a key distinction. Many of those Twitter employees are in
a lockdown(?) period post IPO where they are not allowed to sell their shares
(typically 6 months). Thus they don't have the option of becoming cash
millionaires right now. (Many startup founders are this way post series A)

Compare this to a case where someone owns $1MM worth of Google shares,
purchased on the open market. Even though they don't have cash, it's basically
as if they own cash, since you can liquidate the shares right away.

