Twitter Short Sellers Keep Increasing Stakes Even As Stock Rises

Twitter Short Sellers Keep Increasing Stakes Even As Stock Rises

Despite a blowout earnings report by Twitter (TWTR) last week that indicated its turnaround strategy is working, short sellers continued to increase their position in the social media company, according to financial research firm S3 Partners Short interest in Twitter has been climbing throughout 2018, S3 said in a note late Tuesday. "Unless the firm can continue to increase revenue and profits without depending on cutting R&D, sales and marketing expenses, shorts will continue to hold onto or build their short exposure waiting for Twitter's stock price to fall back into the teens," S3 said. Last week, Twitter received several price-target increases from analysts after a fourth-quarter earnings report that topped the consensus estimates, reported after the market close on Wednesday. On Thursday, Twitter shares rose as much as 30% before settling back to finish the regular session at 30.18, up 12%. IBD'S TAKE: Twitter has a strong IBD Composite Rating of 98 out of a possible 99 and a strong Relative Strength Rating of 98. The stock is trading well above its 50-day moving average, which can be a positive indicator. A person who sells a stock short does so by borrowing shares and selling them. S3 said short interest in Alibaba shares, by dollar volume, is among the highest of any stock worldwide. Short interest in Alibaba exceeds $22.4 billion, it said. Revenue soared 56% to $12.8 billion.

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Despite a blowout earnings report by Twitter (TWTR) last week that indicated its turnaround strategy is working, short sellers continued to increase their position in the social media company, according to financial research firm S3 Partners

Short interest in Twitter has been climbing throughout 2018, S3 said in a note late Tuesday. The value of Twitter short positions started the year at $911 million and has added $400 million since then for total short interest of $1.3 billion, said S3.

That’s the eighth-largest short position in the internet and software services sector worldwide, it said.

“Unless the firm can continue to increase revenue and profits without depending on cutting R&D, sales and marketing expenses, shorts will continue to hold onto or build their short exposure waiting for Twitter’s stock price to fall back into the teens,” S3 said.

Last week, Twitter received several price-target increases from analysts…

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