Are Investors Trending Toward Bullish on Twitter Stock?
Twitter Inc (NYSE:TWTR) is up around one percent on Tuesday as investors are decreasing their short-interest positions by 21%, showing that many are turning bullish on the otherwise-struggling stock.
Twitter stock has had a rough go of it for most of 2016, being down about 20% since the beginning of the year. But today marks—if not a reversal of fortunes—at least a step in the right direction. (Source: “Twitter Stock Short Interest Declines 21% (TWTR) Twitter Stock Short Interest Declines 21% (TWTR),” Investopedia, November 29, 2016.)
While the number of investors taking short positions on Twitter stock is still relatively high, with 53.26 million shares sold short, this is still an improvement over the past few weeks. For instance, two weeks ago, the company had 67.66 million shares sold short. Compared to other tech companies in better positions versus TWTR stock—like Facebook Inc (NASDAQ:FB), where only 24.78 million shares were sold short—the view on Twitter stock looks more sour. But it’s trending downward, which is a start.
The question comes out to whether investors believe that Twitter stock has hit bottom, or if there’s more room for it to drop.
The fall of TWTR stock from its once-dominant position is a multi-tiered one. Instead of a single defining moment that pushed Twitter stock down, it was more like death by a thousand cuts.
From the introduction (and subsequent popularity explosion) of “Instagram” (owned by Facebook) and “Snapchat” (owned by Snap Inc.), to the lack of—or late response to—user feedback, to the eventual brain drain as some of Twitter’s top talent left the company, Twitter stock has been looking for a way out of the hole for some time now.
Whether today is the start of a new push upward or is just an aberration, it’s still good news for a share that is in desperate need of exactly that. Keep an eye on how TWTR stock performs going forward to see just what the decline in shorting means for Twitter stock down the road. (Source: “Here’s Why Twitter Inc. (TWTR) Stock Is Down 81% From Its High Despite Three Product Changes,” International Business Times, May 24, 2016.)
Editor’s Note: Hi, Stephen Karmazyn here. If you enjoyed this article, you can get more of my opinions and commentaries in our popular daily tech letter, Profit Confidential. Published daily, it’s FREE! .