Social Media

Niles turns bullish on Twitter after shorting since IPO

Twitter bear turns bullish
VIDEO4:5804:58
Twitter bear turns bullish

Dan Niles, senior portfolio manager at Alphaone Capital, has turned bullish on Twitter after shorting it for years.

Niles disclosed that he recently bought shares of the embattled tech stock while speaking on CNBC's "Halftime Report" on Tuesday, citing its new search deal with Google as a potential catalyst.

The deal will let Google users access tweets in real time they search. Niles says the endeavor should help boost its monthly active users, an area Twitter has struggled with.

Read MoreThe social apps with the the highest retention

Twitter shares popped as much as 5 percent in afternoon trading on unsubstantiated rumors that it had hired an advisor to help it fend off a takeover bid, according to StreetAccount.

When asked about the takeover rumors, Niles said he sees why Twitter could be seen as a takeover target. But he said that's not why he's in.

"Google is really pretty much getting killed in the social category. Who uses Google Plus? That's pretty much dead," Niles said. "If you're sort of Google or somebody else who's trying to get your growth reinvigorated, Twitter is obviously somebody that you can look at…"