Twitter Inc (TWTR)

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Option Traders, Analysts React to Twitter's (TWTR) Post-Earnings Plummet
By: Schaeffer's Investment Research | April 30, 2021

• A slew of bear notes were dished out for the social media giant

• Twitter reported first quarter earnings and revenue that beat Wall Street's forecasts

The shares of Twitter Inc (NYSE:TWTR) are plummeting this morning, last seen down 13.3% to trade at $56.44. The social media giant is brushing off first-quarter top- and bottom-line beats, warning that its expenses are rising amid worries that user growth is slowing down. In response, no less than 14 analysts chimed in with bear notes.

On the charts, Twitter stock is trading below the $58 level for the first time since early February, when the equity was still carving a channel of higher highs that culminated in a Feb. 25 all-time high of $80.75. TWTR is also at risk of closing below the 120-day moving average for the first time since July 2020.

Circling back to today's analyst coverage, a series of bear notes were rapidly dished out in the form of price-target cuts. One of the largest came from Oppenheimer, which cut its price target to $70 from $85. Analysts already leaned bearish coming into today, with 15 of 25 covering brokerages calling the security a tepid "hold" or worse. Meanwhile, the consensus 12-month price target of $67.88 sits at an 18.5% premium to current levels.

Twitter's options pits have exploded with activity today. Already over 145,000 calls and 98,000 puts have crossed the tape -- seven times the average intraday amount -- with volume pacing for the 100th percentile of its annual range. Most of the attention is being directed at the weekly 4/30 57-strike call, where new positions are being bought to open, suggesting these traders are speculating on the $57 level holding as a ceiling for the underlying equity until tonight's close when these contacts expire.

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