This dead-cat bounce for Twitter shares appears over

SAN FRANCISCO -- Stocks that plunge on a nasty earnings or forecast surprise usually stay down for many weeks or months, as noted here last month regarding Twitter.

The shock of all those analysts whose investment banking clients won't know the true nature of a company's finances until after a stock market plunge takes a while to spread through the markets.

So it has been with Twitter, whose shares were down again Wednesday -- even though the company unveiled what looked on its surface like a big marketing win courtesy of Google.

Twitter shares, which lost more than a fifth of their value during a two-day slaughter at the end of April, have now fallen another 13% since.

With the Internet search giant once again including tweets in its search results after a four-year absence, the deal should drive more users to Twitter's service just as stock bulls should be getting behind the positive Google news.

Yet CEO Dick Costolo and CFO Anthony Noto face skepticism after the company's first-quarter user growth disappointed and its revenue forecast was cut.

The stock fell almost 2% Wednesday on trading volume that was slightly heavier than the shares' three-month average. Twitter shares closed just under $37 a share.

The company had to cut its forecast because its online ad auctions weren't generating prices as high as Twitter expected.

The same day it issued its lowered forecast, it unveiled an agreement with Google's Double Click unit to use its digital ad service.

Now it will also be relying on Google for user traffic, increasing the ties between the two companies.

Yet Twitter sentiment remains bearish, as Wall Street's profit expectations for the company have come down along with revenue estimates.

Next year's EPS number has been slashed to 67 cents a share, from 80 cents a share before the first-quarter earnings debacle, based on the average estimate of the 37 analysts who cover Twitter's stock.

The average profit estimate for 2015 has been cut to 34 cents a share from 38 cents.

And those numbers are adjusted to exclude Twitter's enormous stock-compensation costs and so don't represent a net profit.

Twitter, founded in 2007, has never had a profitable year as measured by net income.

With growth and profit expectations both being dialed back by analysts -- and the shares falling on good news -- it's likely that any rallies in Twitter shares this quarter will fade, as they say on Wall Street, like a dead-cat bounce.

John Shinal has covered tech and financial markets for more than 15 years at Bloomberg, BusinessWeek,The San Francisco Chronicle, Dow Jones MarketWatch, Wall Street Journal Digital Network and others. Follow him on Twitter: @johnshinal.