Option Trade 
Twitter Inc (NYSE:TWTR) Puts 
Tuesday, 09 February, 2016

**OPTION TRADE: Buy the TWTR Mar 2016 15.000 put (TWTR160318P00015000) at approximately $2.10. Place a pre-determined sell at $4.20.

Note: No protective stop losses added -- but if you wish to do so make it $0.85.

by Ian Harvey

February 09, 2016

What more can be said -- it's no secret that Twitter Inc (NYSE: TWTR), a global platform for public self-expression and conversation in real time, has been struggling to boost engagement for its flagship product, but new data indicates just how bad it's gotten. Data, taken directly from Twitter's API, or application programming interface, which allows developers to access Twitter's data to integrate with their own apps, shows the number of tweets per day has fallen more than 50% from its peak in August 2014. Twitter officially responded saying, "This data is not correct."

If it's not accurate, Twitter is providing misleading data to its developer partners -- and it already has a shaky past with developers to begin with. At the very least, comparing the "inaccurate" data stream to itself in a different period should provide a good view of the trends on Twitter.

Analysts await Twitter Inc to reports earnings on February, 10th after the close. They expect $-0.13 EPS, up 13.33% or $0.02 from last year’s $-0.15 per share. After $-0.15 actual EPS reported by Twitter Inc for the previous quarter, Wall Street now forecasts -13.33% EPS growth.

Twitter Inc. stock, which traded at $26 per share when it opened on the New York Stock Exchange in November 2013, has been trading at all-time lows recently. The stock hit a record low of $17.15 on January 19th and has continued to fall -- and shares fell another 5.28 percent Monday, closing at $14.89, its lowest point since its 2013 initial public offering. This grim trend tracks product shifts and executive shakeups at the struggling microblogging site.

In the Fall of 2013, Twitter was considered the most-important social network for teens in the United States, according to Piper Jaffray's semi-annual survey of American teens. Since then, however, Twitter has been surpassed by Facebook 's Instagram, and it's followed closely by Snapchat. A Pew poll from 2014 and 2015 found that more teens use Instagram and Snapchat more often than Twitter.

The stock lows also follow reports of Twitter making a big change to the product that would fundamentally shift the real-time nature of the site. A BuzzFeed report on Friday said Twitter will radically alter the timeline with an algorithm that shows tweets based on popularity and not in chronological order.

Twitter also may have experienced lows in terms of social sharing for Super Bowl 50. While the company touted record numbers last year, Twitter’s blog post failed to show what this year’s numbers were.

Upheaval on the staff side is shaking Twitter as well. Four top executives left last month: the head of product, the head of engineering, the head of media and the human resources lead.

None of the vacancies has been filled permanently, as of yet.

Below is a breakdown of Twitter differentiators and areas that are of concern:-

• Real-time advertising seems to be a field of increasing competition, far from maturity.

• Live-streaming service Periscope is also facing increasing competition, with Facebook Inc FB having entered the arena.

• Another area where competition is escalating quickly and the fight for scraps is intensifying, is that of video ad solutions, where other contenders like Facebook, YouTube, Instagram and Snapchat are bound to make Twitter struggle for attention.

• A reduced reliance by the most influential people on Twitter as their platform of choice has suggested a marked decline in future advertisers' confidence.

These influencers are critical to TWTR maintaining its mindshare and differentiation in the market. If the platform loses its sizzle, it will also bleed advertiser interest.

Twitters has failed to remain at the top of the heap in terms of being a platform where engagement is happening.

There has not been enough cool new stuff introduced by the company recently. Instead, they're seeing other well-financed competitors presenting new, more competitive features.

Also, since March 5, 2015, the stock has had nil buys, but 12 selling transactions for $3.56 million net activity.

Twitter Inc Senior VP – Engineering Alexander Roetter on the February 08, 2016 unloaded a total of 14,474 shares of the Pinksheet-listed Twitter Inc valued by the market at approximately $244,006 USD. This is not his first insider trade, in the last 30 days; he unloaded another 22,313 shares worth $431,406 USD. Alexander Roetter now indirectly has rights to 0 shares.

Harvey’s Options Volatility Indicator

Therefore, based on the facts above, and Harvey’s Options Volatility Indicator, the following option trade is recommended…..

**OPTION TRADE: Buy the TWTR Mar 2016 15.000 put (TWTR160318P00015000) at approximately $2.10. Place a pre-determined sell at $4.20.

Note: No protective stop losses added -- but if you wish to do so make it $0.85.

”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.

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