There's just not enough reason for insiders not to take profits, say StockTwits investors. Twitter trades at 156 times expected 2015 earnings. That's a higher multiple than other social networks such as LinkedIn (LNKD) and Facebook (FB).
Shares have been on a downward trajectory since February. They are roughly 47% lower than Twitter's all-time high of $74.73. And Barron's came out with an article over the weekend arguing that shares have further to fall. Barron's main argument is that Twitter is too pricey given its slowing user growth.
To be sure, some investors argue that Twitter might actually go up tomorrow. The high percentage short interest in the name could lead to a squeeze if the anticipated deluge of insider selling doesn't happen. Short-interest on the stock is 14% of float, according to shortsqueeze.com.
$TWTR does not have to sell off u know. Twitter may trade up even after a sell off due to the huge amounts of shorts in the name.-- H&S (@HeadandShoulders) May. 5 at 12:04 PM
But many more investors anticipate that Twitter insiders will shed shares, if for no other reasons than to pay off taxes.
$TWTR insiders wanted to start a squeeze they just don't sell....but I'm sure many will want to take some profits..need to tax man-- RJ (@ryjo) May. 5 at 01:55 PM
At the time of publication, the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.