Twitter Short Interest Jumps Over 4 Million Shares

By Douglas A. McIntyre Updated Jan 13, 3:07AM EST · Published Sep 27, 7:20AM EDT

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Twitter Short Interest Jumps Over 4 Million Shares — © Wikimedia Commons

[cnxvideo id=”655424″ placement=”ros”]Sellers who have shorted Twitter Inc. (NYSE: TWTR) shares likely got slammed recently on rumors about a buyout from Walt Disney Co. (NYSE: DIS), Salesforce.com Inc. (NYSE: CRM) and Microsoft Corp. (NASDAQ: MSFT). Shares have risen over 20% recently to $23.27. The short interest in Twitter rose 4.3 million in the period that ended September 15 to 55.5 million. That is nearly 10% of the float.

Investors have had plenty of reason to bet against Twitter as the turnaround of CEO Jack Dorsey has failed. User growth has plateaued at just above 300 million. Earnings have been troubling, as has guidance. For the periods ahead, the outlook is poor, barely better than last year’s results:

For Q3, we expect:

Revenue to be in the range of $590 to $610 million;

Adjusted EBITDA to be in the range of $135 to $150 million;

Stock-based compensation expense to be in the range of $165 to $175
million;

GAAP share count to be in the range of 705 to 710 million shares;

Non-GAAP share count to be in the range of 715 to 725 million shares.

For FY 2016, we expect:

Capital expenditures to be $300 to $375 million;

Adjusted EBITDA margin to be 26-27%.

And Twitter’s shares have acted appropriately. Before the takeover rumors, they were down 31% year to date. If no buyer materializes, the drop will continue.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.