- 5 years ago

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Twitter plans on completing its $800 million round of funding within the next two weeks, according to AllThingsDigital.

Half of the funding is intended to help investors and employees cash out in an “organized and legal manner.” 

With the company having no news about an IPO in the near future (although it must be tempting given the insane valuations floating around this year), it’s a wise move to internally monetize its privately held common stock for those ready to realize the return on their investment.

This funding will value Twitter at roughly $8 billion. As The New York Times reported last week, this valuation seems unjustifiably high. The San Fransisco microblogging company is currently making about $200 million annually off its advertising platform (promoted tweets and the like). But this only breaks even its costs—the company has yet to become officially profitable.

It’s not known who can sell Twitter shares as part of this deal, or how much they can sell. But it’s highly similar to Facebook’s 2009 funding that aimed to accomplish the same effect. In that deal, top leadership could not sell any stakes, but employees could cash out up to 20 percent of their shares.