It's been a bad day for anyone who bought yesterday's pop in Twitter (TWTR). Shares are down -20% today, after Twitter takeout rumors were shot down.
Hedgeye Internet & Media analyst Hesham Shaaban has noted in the past that Twitter is struggling to monetize it's user base and reiterated yesterday that he doesn't think the company has "enough potential suitors to actually field a competitive bidding process." But he also warned that CRM’s hesitation to kill the TWTR rumor (despite mounting pressure on its stock over the past week) suggested that Salesforce CEO Marc Benioff could actually be interested.
However a few hours later, Benioff appeared to have gotten the message and was essentially forced to put that story to rest going live on CNBC saying: "[Twitter] is a great product. It's an exciting product, but obviously the business has a lot of challenges, very severe challenges."
Shaaban writes in a note sent to institutional subscribers earlier today: "If TWTR is still public by the 3Q print, it would effectively kill its own M&A prospects in the eyes of the street. Going back to our original thesis, if there is any whiff of potentially declining revenues in the near future off the 3Q print, we suspect TWTR will be on its own for a while”
We're guessing CEO Jack Dorsey wishes he never came back.