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Twitter Could Hit Shorts Right Where it Hurts Next Week

Social media king Twitter Inc. (TWTR) is due to report earnings next Thursday before the market open. Wall Street analysts, on average, expect Twitter to report revenue of $535.61 million on earnings of 5 cents per share.

Shares of Twitter have made an amazing run over the last three months, with shares up a whopping 38%. What's amazing about that rally is that it has come on virtually no major news, besides the naming of a new CFO. Momentum investors continue to bid the stock up ahead of the quarter, and some on Wall Street are predicting that Twitter will repot its first ever quarterly profit.

However, one Wall Street firm sees trouble ahead for Twitter, after Morgan Stanley's Brian Nowak said in a note on Thursday that he expects the stock to eventually drop 50% due to lack of spending from advertisers. If Nowak is right, then shares of Twitter will eventually trade down to $10 a share.

Fortunately for the Twitter bulls, nothing in the price action and...