Why Twitter Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: In the absence of any fresh news, shares of Twitter, (NYSE: TWTR  ) jumped more than 10% during intraday trading Monday.

So what: That said, analysts at Evercore Partners have already chimed in to say it appears today's rise is likely the result of continued investor excitement surrounding Twitter's unveiling of Tailored Audiences, which effectively affords Twitter the ability to retarget users, and display more relevant advertisements. 

Now what: Twitter states it has seen "impressive results" from advertisers who've used the program in a beta capacity over the past several months, including a 45% lift in engagement rates from inbound marketing specialist HubSpot. What's more, sports game video analyst Krossover says Tailored Audiences enabled a 74% decrease in acquisition cost per customer, and app performance company New Relic enjoyed 195% higher conversion rates targeting its website visitors.

To be sure, the new initiative should go a long way toward improving Twitter's value proposition for advertisers, so it's hard to blame investors for their optimism. However, with Twitter stock currently trading at the highest point since its IPO, and more than 45 times sales after today's pop, I'd personally prefer waiting for a pullback before establishing any long-term positions.

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