Takeaway: Today’s move is a reminder that it’s not worth staying short so far removed from our next catalyst. We'll revisit the short in 2017

COVERING BUT COMING BACK: TWTR move today is another reminder that there’s nothing to play for between now and the next time TWTR reports, especially since there’s always the risk of being blown up by the next round of take-out chatter.  But we’re planning on coming back closer to the next print.  TWTR’s model has taken a fundamental turn for the worse, and we continue to expect TWTR to face declining revenue growth as early as the 4Q print, and mgmt didn’t do themselves any favors by not explicitly guiding to it.  In turn, consensus is looking for slowly accelerating revenue growth from 4Q16 through 2017, and that is despite TWTR’s planned workforce reduction that is largely concentrated within Sales & Marketing.  See the note below for most recent detail on our thesis.

TWTR | Kicking the Can (3Q16)
10/27/16 11:12 AM EDT
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Let us know if you have any questions or would like to discuss in more detail.

Hesham Shaaban, CFA
Managing Director