Ballmer, who ran Microsoft for 14 years, has an estimated personal fortune of $US21.5 billion, making him the 35th richest person in the world, according to Forbes magazine.
His stake in the social media company is worth about $US800 million, based on its market value.
Neither Twitter nor Ballmer would speak to Reuters about the holding.
Twitter announced plans earlier this week to lay off up to 336 people, slashing about 8% of its workforce worldwide.
The announcement came as the social media company struggles to attract new users and impress Wall Street.
The company is trying to change how it works and is looking at what it needs to do to accomplish its goals, chief executive and co-founder Jack Dorsey said in a frank email to employees.
Twitter expects its third-quarter earnings, which are scheduled for October 27, to be at or above its forecast, which at the high end is an estimated $US560 million in revenue and adjusted earnings of $US115 million, according to a filing with the US Securities and Exchange Commission.
As of June 30, Twitter had about 4100 employees and more than 35 offices worldwide, according to the company's website.
