Cramer: Twitter takeover 'off the table' after Dorsey ups stake

Jim Cramer explains why Twitter shares are sliding

Twitter shares fell on Wednesday, despite a big vote of confidence from the CEO.

CEO Jack Dorsey bought $7 million of shares in the company, according to regulatory filings posted on Tuesday. In a tweet, Dorsey implied the purchase showed his "love" of the company.

But that endorsement suggests Twitter is not in talks to sell itself any time soon, CNBC's Jim Cramer said on "Squawk on the Street" on Wednesday.

"The zeitgeist around this company's stock is so negative that — immediately — what's the takeaway? I've got three guys saying you've got to short Twitter, because now you know there can't be a takeover," Cramer said. "Dorsey would have known. He is buying stock. It takes it off the table."

Twitter declined to comment further on the transaction when it was announced.

Twitter's shares are down more than 13 percent over the past week, after the company reported earnings guidance that fell far short of what Wall Street expected for the fourth quarter of 2016. When a company is bought, the acquirer often offers a premium on the publicly traded price.

Last fall, companies including Google, Salesforce, and Disney were reported to be looking at Twitter, which has seen a stall in user growth for the past couple years, and has struggled to monetize its users at the same pace as rivals like Facebook. But a deal never came to light.

"They are basically, I think, not in a good quarter," Cramer said. "But they are in a longer-term, 'let's crater the quarter, let's look at what can happen in 2018' mode..... but when a guy buys a lot of stock, I can't hate it as much as I did before."

Disclosure: Cramer's trust owns shares of Facebook