Why Eagle Bay Capital Founder JC Parets Calls Twitter 'Dead Money'

Parets, Founder and President of Eagle Bay Capital discussed how to trade

following its quarterly earnings report. "I think its dead money here," Parets said with conviction. The trading pro went on to note that shares "exploded" to the upside a month and a half ago, reaching previous highs seen in August and September of last year and hit his price objective. However, the highs created a "clear" overhead supply. He continued that "the market is a lot smarter than we are" and some investors had completely ignored the overhead supply – an "irresponsible" move by not "acknowledging" the reality that an overhead supply exists. "It's [going to be] dead money for a while," Parets repeated. "This thing is broke." Parets noted that investors buying at current levels could nevertheless see a bounce. In fact, shares of Twitter were trading higher by nearly two percent by Thursday early-afternoon. Parets also added that a four-point bounce could be possible and this would net short term traders around a 10 percent gain. He then encouraged investors to sell Twitter if they realize a 10 percent gain in the short term and consider the opportunity cost of missing out on other investment ideas and owning Twitter for the long term is "not a place where you want to be."