A photo from the CEO of Goldman Sachs is fueling Twitter takeover chatter (TWTR)

lloyd blankfein jack dorsey

Twitter's stock surged as much as 7.3% on Thursday after Goldman Sachs CEO Lloyd Blankfein tweeted a picture of himself at the company's headquarters.
Goldman had reportedly advised Twitter in takeover discussions with Disney last year, and the tweet fueled speculation that a deal could be in the works.
Short sellers are scaling back bearish bets on Twitter.

Traders are piling back on the Twitter bandwagon.

The company's stock surged as much as 7.3% on Thursday, closing at its highest level in 14 months, after Goldman Sachs CEO Lloyd Blankfein tweeted a picture of himself with Jack Dorsey at Twitter's offices in San Francisco.

The tweet fueled speculation that Twitter may be reengaging in the deal talks it started last year when it was considering a sale to Disney, with Goldman as its adviser. And it was interestingly timed, considering Disney had completed a $52.4 billion acquisition of 21st Century Fox's film and TV assets earlier that same day.

And they say I don’t know jack! http://pic.twitter.com/RkKgJdjnb0
— Lloyd Blankfein (@lloydblankfein) December 13, 2017

Blankfein was at Twitter's office for a long-running question-and-answer series with well-known users, during which Dorsey sported some questionable footwear.

The speculation has provided a welcome boost for Twitter's stock, which lost almost half of its market value over a six-month period starting in October 2016. The company has been grappling with declining revenue and slowing user growth for some time now, though its shares have recovered in recent weeks.

Amid the fervor around Twitter's stock, and looking past Thursday's single-day share surge, traders are looking more bullish on the company going forward. Short interest — a measure of bets that a stock will drop — has declined by $32 million, or 44%, since hitting a high in April, according to data compiled by the financial-analytics firm S3 Partners.

In other words, bearish speculators are seeing less of a reason to bet against the stock, or protect against future losses.

Twitter's stock rose 0.5% to $22.69 in early trading on Friday.

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