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Sep 8, 2016

S3 BLACKLIGHT: Twitter Short Interest Currently Near Low

Shares of Twitter (TWTR US) are down close to 6% today on the back of the company claiming it has “no bids on the table” to be acquired.  Traders have been speculating since mid-year that the social networking behemoth will be a takeover target, contributing to the 30% pop in price since June.

According to the S3 Velocity Indicator, a measure of the real-time relative change in shorting activity, shorts had been covering their positions throughout all of August, with all three trend lines (7, 30 and 90 day) sloping consistently downward.   After today’s price drop, current short interest is now estimated to be as low as $850million, close to levels seen back in February of this year.  In contrast, researching as far back to its 2013 IPO, short interest hit as high as $2.5billion in early 2014.

With the securities lending market currently awash with supply at general collateral/cheapest rates, traders who don’t believe in Jack Dorsey’s turnaround plan will have no issue re-establishing bearish bets leading up to next month’s earnings call. 

For more information on the above analysis, please contact:
Matthew Unterman, Director, S3 Partners, LLC    

The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC ('S3 Partners') to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks and merits, as well as the legal, tax, accounting and investment consequences, of such decision.

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