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How's The Jack Dorsey Trade Playing Out This Year?

How's The Jack Dorsey Trade Playing Out This Year? - Twitter NYSE:TWTR, Square NYSE:SQ

Jack Dorsey is co-founder and CEO of two of the most innovative technology companies in the world: social media giant Twitter Inc (NYSE: TWTR) and mobile payments company Square Inc (NYSE: SQ).

Unfortunately for shareholders, the market doesn’t care nearly as much about innovation as it does about dollars and cents.

Even with Square shares are surging 13.2 percent on Thursday following big Q2 earnings and revenue beats, the Jack Dorsey trade is not working very well in 2016.

While the SPDR S&P 500 ETF Trust (NYSE: SPY) is up 6.2 percent on the year, Square shares are down 9.7 percent and Twitter has plummeted 22.7 percent year-to-date.

Twitter stock now trades 31.1 percent below its 2013 IPO price. Square has fared much better in its short stint as a public company. The post-earnings spike now has shares trading 31.4 percent above its November 2015 IPO price.

Even though Square’s stock has underperformed so far in 2016, the encouraging Q2 numbers are a welcome relief for Dorsey followers. Twitter has struggled to come up with a growth strategy for years, and the company’s Q2 earnings report offered little grounds for optimism.

Luckily for Twitter investors, a steady stream of buyout rumors has kept the stock afloat in recent months.

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Disclosure: The author holds no position in the stocks mentioned.

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