Trampled Tech Stocks Like Blue Apron Revived After EarningsBy
Earnings season can be a volatile time for tech stocks, especially during the wild market ride of the past two weeks. But for beaten-down tech stocks like Snap Inc. and Twitter Inc., quarterly results have triggered unexpected gains. Throw in some elevated short interest on Snap and ongoing M&A chatter on Twitter, and the result was powerful rallies.
This dead-cat bounce trend in tech continued Tuesday, with shares of Blue Apron Holdings Inc. rising as much as 25 percent after fourth-quarter revenue topped analyst estimates and the company noted some signs that the business is stabilizing. Short covering was also a likely contributor to the strength, with the short interest at 26 percent of the free float, according to Markit data.
Shares of Snap surged 48 percent on February 7 after its fourth-quarter daily users and revenue beat estimates. A day later, Twitter closed up 12 percent and rose as much as 30 percent intraday on surprisingly strong fourth-quarter revenue, particularly in advertising. Adding to the sudden turnaround in sentiment on Twitter has been ongoing takeout speculation among traders in the wake of Chief Operating Officer Anthony Noto’s resignation from the company in January.