Twitter Stock Surges After Billion-Dollar Sale

Options traders have been bullish towards Twitter stock

Digital Content Manager
Oct 7, 2021 at 11:43 AM
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The shares of Twitter Inc (NYSE:TWTR) are surging today, last seen up 4.5% at $64.03, after the social media giant announced it agreed to sell its mobile ads company MoPub to AppLovin (APP) for $1.05 billion in an all-cash deal. The sale will allow Twitter to invest in "core products that position it for long-term growth," according to CEO Jack Dorsey.

It has been a volatile year for Twitter stock thus far, trading as high as a Feb. 25 all-time high of $80.75 but grazing the $58 level in recent weeks. Despite struggling with overhead pressure at the 60-day moving average, TWTR still sports a healthy 39.7% year-over-year lead. 

TWTR 60 Day

Analysts have been hesitant towards Twitter stock. Of the 23 in question, 16 carry a tepid "hold" or worse rating, while seven say "strong buy." Meanwhile, the 12-month consensus target price of $71.54 is a 11.6% premium to the equity's current perch.

The options pits are firmly in the bullish camp, with a fierce appetite for calls. This is per the stock's 10-day call/put volume ratio of 3.80 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 93% of annual readings, indicating calls have been getting picked up at a faster-than-usual clip.

For those wanting to speculate on TWTR's next move, options look like a solid choice. The equity's Schaeffer's Volatility Index (SVI) of 40% sits higher than 13% of readings from the past year, suggesting options players are pricing in low volatility expectations right now. Plus, Twitter stock's Schaeffer's Volatility Scorecard (SVS) sits at 97 out of 100. This means the equity has exceeded options traders' volatility expectations in the last 12 months -- a boon for buyers. 


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