Twitter (TWTR) CEO Dorsey's Insider Trades Could Sink M&A Hopes

News that Twitter's (NYSE: TWTR) CEO Jack Dorsey bought $7 million in stock is seen as mixed, if not an outright negative for shares, as it appears to dash hopes that the company will be acquired in the near term. If Twitter was engaged in talks, as has been speculated, he couldn't buy shares, pointed out Odeon analyst Jahanara Nissar.

"I think Investors should use the opportunity to short the stock on any strength," said Nissar. "This probably means a takeover is unlikely near term as he can't buy if TWTR was engaged in talks. There is a takeout premium in the stock at current levels."

Nissar also highlighted that those investors hoping for a change in leadership may be disappointed, as Dorsey appears to be staying.

Furthermore, buying by Dorsey hasn't always been a positive indicator.

"He has also bought TWTR in the $30's so not the best indicator of future stock performance," said the analyst.

Net-net, Odeon thinks the news is negative for the stock.

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