This Metric Says Investors Should Bet On Only 1 Of These 2 Collapsing Stocks

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Twitter Inc (NYSE:TWTR)‘s shares are down after market research firm eMarketer cut its global ad revenue estimate for the social medial company, while Citigroup analyst Mark May cut his price target to $30 from $37 and downgraded the stock to ‘Neutral/High Risk’ from ‘Neutral’. May doesn’t believe Twitter can meet consensus monetization forecasts in the quarter ahead. Twitter hasn’t found a permanent CEO yet, and the leadership uncertainty comes at a delicate time for Twitter, as the social media company struggles to monetize and grow its audience. Shares of Twitter are down by 25% year-to-date and trade at a forward P/E of 42.8.

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The performance of the company and its stock seems to be aligned with hedge fund sentiment, as the funds tracked by Insider Monkey were very bearish on Twitter during the second quarter. The total number of hedge funds long Twitter Inc (NYSE:TWTR) declined to 47 by the end of the second quarter from 64 in the quarter prior. The total value of hedge funds’ holdings declined to $701 million (2.9% of the float) at the end of June from $1.75 billion at the end of March. David Shaw‘s D. E. Shaw increased its position of put options on Twitter by 115% to cover 2.2 million underlying shares.

Disclosure: None

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