This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Cramer: Navigating the Twitter Minefield

And if the trajectory doesn't reaccelerate? I think it goes back to $30, where it did when the stock was overwhelmed with insider selling.

That, to me, is about as even a risk/reward as I have seen in some time. That makes this one a dangerous and impenetrable battleground that I want to avoid.

What's difficult for so many people out there is that because they like the product so much they demand an opinion. That's needless pressure. Does anyone demand an opinion on any of the Dow stocks? Really? Does anyone put a gun to your head and ask you about Pfizer (PFE) or Lilly (LLY) or 3M (MMM) or Exxon (XOM)?

No, and that's why they are easier to figure out. The trajectory of those stocks relates directly to the company's financial future. That's not the case with Twitter. Users love it and they want it to go higher, but they do not control enough stock to combat institutional selling.

What would change my mind about Twitter and cause me to want to overlook the near-term worries? Twitter bulls need to see some discipline and stability up top. They need Anthony Noto to assert himself as a strong chief financial officer. They need to show us which advertisers are using them and what percentage of the digital pie are they taking. Is it growing? Growing faster than Facebook? Than Google (GOOGL)?

These comparisons and a calming at the top would go a long way toward making this stock more investable. Why? Because you would be able to craft a scenario where if this current team can't figure out how to make money off all of those users, another team, some flush company that can buy them. Yahoo! (YHOO) after Alibaba, or Microsoft (MSFT) or Apple (AAPL) can do so.

Many of the people in these companies like Twitter as part of a daily routine and many regard it as a news source. The pressure for many news people to actually break news on Twitter attests to that, and in a David Carr column in today's New York Times he writes about a foreign correspondent who defends herself from charges she isn't tweeting enough because she is spending time trying to write for paid readers.

They believe that Twitter can be another interface to bring in and lock up members into their own ecosystems.

That possibility tips me into the camp that wants to buy Twitter on weakness toward the low end of its range, even as I can't countenance recommending it ahead of the earnings because I fear the earnings expectations as being too high, the opposite, for example, of the expectations going into Facebook's number.

Read More: The Best Android Phone in the World and 9 Runner Runner-Ups

So, if you are a Twitter junkie and you insist on playing it, recognize the 50/50 nature of it and that there are many seasoned stocks out there with much better odds, a calculation that I regard as incredibly important that many say to me is simply irrelevant.

Random Musings: Dollar Tree's (DLTR) buying of Family Dollar (FDO) is huge for Dollar Tree because Family Dollar's been so poorly run and Dollar Tree is a great operator. More importantly, companies in play get bought in this bountiful era.

Action Alerts PLUS,  which Cramer co-manages as a charitable trust, is long AAPL, FB, GOOGL and XLNX.

This article was originally published on Real Money at 6:45 a.m. on July 28.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Real Money
Try it NOW

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs