Hedge Fund Manager: Why Twitter Could 'Rally Hard'

Todd Sullivan was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick.

Hedge Fund Manager and Rand Strategic Partners Founder Todd Sullivan told Benzinga that a new story could change the way the market perceives Twitter Inc (NYSE: TWTR), as well as its momentum. According to Sullivan, that news is likely to be related to one of two fundamental stories overhanging shares: the new CEO search or a potential acquisition.

Right now, Sullivan said that Twitter was wondering about "with no direction." That's because the company has not yet figured out advertising, certainly not as effectively as Facebook Inc (NASDAQ: FB). But Sullivan noted that the challenge at Twitter is much harder, particularly since communication is done in 140 character boosts.

If the CEO search yields a "top-notch tech guy," Sullivan sees room for the stock to "rally hard." Likewise, he noted that two potential suitors for the company would be Google Inc (NASDAQ: GOOG) or Apple Inc. (NASDAQ: AAPL), each of which could "buy the thing and meld it into their plans." Sullivan pointed to Google's failed Google+ attempt as evidence that the company may be interested in social.

Year-to-date, Twitter has dropped nearly 25 percent, closing Tuesday below $27 per share.