Twitter is already the dominant force in whatever it is you would call what they do, and they can't fund their operations without huge influxes of cash at regular intervals. This makes me wonder why investors would let them spend investor money on something that doesn't at all help them stay afloat long enough to become profitable.

Perhaps there is something in this that makes them more likely to be a success? Perhaps they are making employees agree to stay for some amount of time as a part of accepting an option buyout? Giving away 5% of the value of your company seems like an expensive way to avoid some SEC paperwork, so I'm at a loss on why they would do this, other than just to be really nice.