Twitter (TWTR) - If you're looking for a stock to short then Twitter seems to be one that should be on trader's radar right now. Having reached $74.73 late last year, it has now lost 40% of its value. The trend lower is strong and the stock will need to break trend resistance at $48.50 to make any sort of attempts at pushing materially higher. One of the things concerning the market is the fact that Twitter only IPO'd 122 million shares out of 588 million, which effectively means there is 476 million shares coming for sale with the post IPO lock up period over. With price still falling we could see holders panic and sell now rather than wait and hope the price rises.
free float of 112m shares as well
the primary Twitter lock-up expires early May (around May 6 i think), ie 180 days after IPO. They could still file for a secondary ahead of that to smooth the transition to a full free float, though obviously the market not as conducive to that as it was a few weeks back. there was an earlier, smaller lock-up expiry in February but this is the big one i believe.
You would think tho that twitter would deliver a good first set of earnings whenever it reports in the coming weeks (such a textbook ipo unlike facebook) am surprised also they haven't filed for a secondary that would allow them to smooth a little the transition to a full free float - more generally the tech sector has disappointed a bit on earnings in previous quarters (more accurately their sales numbers) so I guess that is why the sell off is happening now
That stock overhand would definitely be a concern, seems like a very short escrow period,
I suspect market is also focused on user acquisition and retention. This article was from late Feb but the essence is that Twitter was priced for perfection as a mass market platform. Latest user acquisition numbers was less than perfect and raised a few alarm bells.
Here is the article: http://www.cnbc.com/id/101395956