Twitter Stock Blasted by Options Bears After Musk Pulls Deal

The stock breached a recent floor on the charts in response

Digital Content Manager
Jul 11, 2022 at 10:01 AM
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Over the weekend, it was announced that Tesla (TSLA) CEO Elon Musk would not being going through with his deal to buy Twitter Inc (NYSE:TWTR) for $44 billion. Twitter has since threatened to sue Musk for terminating the deal. Musk responded, using the platform to tweet that the social media company would need to provide more information on spam accounts and bots. In response, the shares of Twitter (TWTR) are falling down the charts, last seen down 6.4% to trade at $34.47. 

Options activity surrounding Twitter stock is already off the charts, with 26,000 calls and 44,000 puts exchanged so far -- six times the intraday average. What's more, put volume is running in the 99th percentile of its annual range. The most popular position is the July 30 put, followed by the 34 put in the same series. 

Analysts are chiming in as well. Since the deal was terminated, both Wedbush and Stifel slashed their price targets, both to $30. This marks Wedbush's second price-target cut in a matter of days, as on Friday, the analyst lowered its price objective to $43 from $54, as it already predicted that the deal was on the brink of collapse. 

Today's negative price action has TWTR breaching a floor we mentioned on Friday at the $37 level. The stock is now trading at its lowest level since March, and suffers a 19.4% year-to-date deficit. 

 

 

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