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.
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.