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MarketScreener Homepage  >  Equities  >  Nyse  >  Twilio Inc.    TWLO


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Twilio : Bets against Twilio climb thanks to fresh supply of shares

11/02/2016 | 01:47pm EST
A banner for communications software provider Twilio Inc., hangs on the facade at the NYSE to celebrate the company's IPO, in New York City

SAN FRANCISCO (Reuters) - Bets against shares in Twilio Inc (>> Twilio Inc) have climbed in recent days, thanks in part to a recent follow-on stock offer that increased the supply of shares available to traders.

SAN FRANCISCO (Reuters) - Bets against shares in Twilio Inc (>> Twilio Inc) have climbed in recent days, thanks in part to a recent follow-on stock offer that increased the supply of shares available to traders.

Twilio's shares were down about 5 percent in afternoon trading on Wednesday, adding to a recent sell-off in the San Francisco software company's stock following a June IPO and a meteoric rally. Short sellers attracted to Twilio's lofty stock price in recent months have ridden it lower and are showing no signs of relenting.

Twilio's software is used by large companies including Netflix (>> Netflix, Inc.), WhatsApp and Uber, allowing them to speak with and text customers without exchanging contact information.

After Twilio's stock hit a record high in September, short interest against it has increased by about 30 percent to about 7.5 million shares, equivalent to $250 million, according to S3 Partners, a financial analytics firm.

By mid-October, short sellers had borrowed virtually every share available in order to bet against the company, pushing the annualized interest rate they paid to the shares owners' up to 100 percent and temporarily putting a virtual stop to additional short positions.

Short sellers borrow shares and then sell them, hoping to repurchase them at a lower price and then return them to their owner. In the meantime, they must also pay interest to the owner.

Twilio on Oct. 20 sold an additional 7 million shares, mostly on behalf of existing shareholders, significantly increasing the number of shares available for lending and allowing short sellers to make new bets against the company.

Since then, the stock has fallen 22 percent, bringing Twilio's sell-off from the end of September to 50 percent.

"Shorts that couldn't get in before are now getting in," said Ihor Dusaniwsky, S3's head of research. "If the trend continues, in another couple of weeks you will be back up to a really expensive borrow."

Twilio is due to give its third-quarter results on Thursday. On Oct. 11, two business days after announcing plans for its follow-on share offer, Twilio reported preliminary third-quarter results that beat analysts' expectations.

Analysts are unusually cautious on Twilio, with just one recommending its shares and eight analysts rating the stock "hold", according to Thomson Reuters data. None recommend selling.

(Reporting by Noel Randewich; Editing by Tom Brown)

By Noel Randewich

Stocks treated in this article : Netflix, Inc., Twilio Inc

© Reuters 2016
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Financials (USD)
Sales 2020 1 668 M - -
Net income 2020 -439 M - -
Net cash 2020 2 912 M - -
P/E ratio 2020 -131x
Yield 2020 -
Capitalization 58 691 M 58 691 M -
EV / Sales 2020 33,4x
EV / Sales 2021 25,3x
Nbr of Employees 3 664
Free-Float 92,4%
Duration : Period :
Twilio Inc. Technical Analysis Chart | TWLO | US90138F1021 | MarketScreener
Technical analysis trends TWILIO INC.
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus BUY
Number of Analysts 27
Average target price 389,48 $
Last Close Price 388,65 $
Spread / Highest target 41,5%
Spread / Average Target 0,21%
Spread / Lowest Target -22,8%
EPS Revisions
Managers and Directors
Jeffery G. Lawson Chairman & Chief Executive Officer
George Hu Chief Operating Officer
Khozema Z. Shipchandler Chief Financial & Accounting Officer
Michelle Grover Chief Information Officer
Jeremiah Brazeau Chief Technology Officer
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