Twitter Shares Slump as ‘Bullish Bias’ Looks Broken to Traders
(Bloomberg) -- Twitter Inc. shares fell as much as 8.7 percent on Thursday, dropping in heavy volume in what was on track to be the social-media company’s biggest one-day percentage loss in more than a month.
There was no obvious catalyst behind the decline, but multiple traders and outlets cited a Politico story about how Fox News -- an account with more than 18 million followers -- hasn’t tweeted since Nov. 8. The report described the lack of tweeting, which was previously noted by New York Magazine on Nov. 14, as a silent protest against the company for how it handled harassment against one of its hosts.
Twitter has dropped almost 35 percent from a recent peak in July. While it remains up nearly 30 percent for 2018, the shares have been mostly range-bound for the past four months after plunging in late July after monthly users dropped. The stock rose a mere 0.4 percent in Wednesday’s session, in contrast to a massive rally across the rest of the technology sector.
“The bullish bias of investors has been broken, and even a small news story can be used as an opportunity to sell,” said Michael Matousek, head trader at U.S. Global Investors. “The fact that Twitter didn’t participate in yesterday’s monster rally makes me think someone was liquidating a large position.”
In emailed comments to Bloomberg News, the company wrote that it didn’t comment on stock movements.
Rob Sanderson, a managing director at MKM Partners who has a buy rating on Twitter shares, said in an email that the Politico story “shines a new light on the boycott.” However, he said it was a “weak” explanation for the shares to be down so sharply.
©2018 Bloomberg L.P.