Shares of Twitter Inc. (NYSE: TWTR) were up more than 4% in the noon hour on Thursday while the three major indexes all traded lower. There is no significant news on the company and we don’t usually consider Twitter a contrarian play. So what’s up?
There are a couple of possibilities. Shares took dive below $38.00 last Friday and slipped near that price again on Tuesday. Twitter was hit with a class-action lawsuit on Friday claiming the company allows spam messages to be sent using short-codes. Then on Tuesday came a report that Pinterest has surpassed Twitter and is now catching up with LinkedIn Corp. (NYSE: LNKD) in popularity among social media users. That is just one survey, but it rattled investors.
Another possibility is that the dip offered buyers an opportunity to pick up Twitter shares at a discount. The consensus price target on the shares is around $43.75 and the stock just bounced off a post-IPO low of around $29.50. The company does not report quarterly results until later in July, so barring any unusually bad news, shares could climb past the price target ahead of the earnings announcement.
Shares were trading at $41.08, up 4.1% Thursday, in a 52-week range of $29.51 to $74.73.