Market Overview

Why JC Parets Calls Twitter 'Dead Money'


JC Parets is a weekly guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick.

Parets, founder and president of Eagle Bay Capital discussed how to trade Twitter Inc (NYSE: TWTR) following its quarterly earnings report.

"I think it's 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 said 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 2 percent by early Thursday afternoon.

Parets 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 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."

Listen to the full interview below:


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Posted-In: #PreMarket Prep Eagle Bay Capital JC ParetsAnalyst Color Exclusives Trading Ideas Interview

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