Shares of Twitter (TWTR) - Get Twitter, Inc. Report are climbing a little more than 1% after CEO Jack Dorsey purchased more stock. He mopped up an extra 426,000 shares, TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, said on CNBC's "Mad Dash" segment Wednesday.
The purchases, made between $15.87 and $16.52 per share bring Dorsey's total stake to 15.46 million shares. Some people criticized the move, however, saying it was an inadequate amount of shares to purchase.
"Where I come from that's a lot of money," Cramer countered. He pointed out that other investors also took a negative reaction to Dorsey's purchase because it means a takeover is not in the cards right now.
Cramer is slightly more positive on Twitter, as Dorsey's recent purchase acts as a sign of confidence. With that said, "this is a revenue-challenged company," he reasoned.
The board will likely give leeway to management, though. The company made a number of investments in 2016 that it is hoping will pay off, and is likely looking for the business to bottom in 2017. The hope is that 2018 shows significant improvements.
While Cramer isn't endorsing Twitter as a buy, he recognizes Dorsey's actions as a positive step. It might not be what investors want to hear, but there is long-term turnaround potential with Twitter, Cramer concluded.
At the time of publication, Cramer's Action Alerts PLUS had no position in companies mentioned.