The Facebook share price [FB] gained 27.3% so far this year to 14 July. The stock fell in 2021 to 8 March, when its $255.31 close left it 6.5% down for the year, but a sustained rally since saw the Facebook share price climb 29.1% to close 29 April on $329.51. The trend has continued, and the Facebook share price is now 47.3% above its level 12 months previously as of 13 July.
Twitter’s share price [TWTR], meanwhile, has also gained 29.8% in the year to date.
Facebook's YTD share price rise
After falling 16.6% in the opening fortnight of the year, the Twitter share price then reached a peak of $77.63 on 1 March, 43.4% up on the year’s opening, before slumping to $50.11 on 13 May, 7.5% down through the year to date. However, a sustained recovery since has left Twitter’s share price 97% above the level it traded at 12 months before (through 14 July).
A tech industry group representing the likes of Facebook and Twitter in Asia has warned that Hong Kong’s new “anti-doxxing” law could make it impossible for tech companies to operate there.
The Asia Internet Coalition, which represents “more than 15 members” including Facebook, Twitter, Google [GOOGL], Amazon [AMZN] and Apple [AAPL], stated that the threat of criminal sanctions and massive fines levied at employees of the companies could force the companies to cease operating in Hong Kong.
The proposed legislation provides for punishments of up to HK$1m in fines and up to five years’ imprisonment for doxxing, the practise of maliciously sharing individuals’ personal information online.
“The only way to avoid these sanctions… would be to refrain from investing and offering the services in Hong Kong,” the group said in a letter dated 25 June. It calls the proposals “completely disproportionate and unnecessary” and criticised plans to criminalise platforms and employees for content they “have no control” over.
“The only way to avoid these sanctions… would be to refrain from investing and offering the services in Hong Kong” - Asia Internet Coalition
On the 25 June, the Facebook share price fall 0.5% and Twitter’s share price dropped 0.5% amid fears over the social media platforms’ forced withdrawal from Hong Kong.
Doxxing became an issue in Hong Kong in the wake of anti-government protests during 2019. Campaigns appeared on both sides of the protests to spread private information such as names, images, contact details and employment details of individuals on opposing sides via platforms like LIHKG and Telegram.
Anti-government protestors targeted the identities of police officers suppressing the protests, while government supporters sought to expose the identities of masked protestors.
The proposed law is the latest in a wave of moves by Beijing to stifle dissent in Hong Kong. Social media companies mostly stopped processing data requests from the Hong Kong government after the implementation of a hugely unpopular national security law in 2020, which opponents say inhibits freedom of expression and human rights.
China vs social tech
Social media as an industry is coming down from a period of rapid expansion, especially through 2020 and in the early weeks of 2021. The theme’s fortunes are illustrated by the performance of the Global X Social Media ETF [SOCL], a fund which tracks the Solactive Social Media Total Return Index.
In the year to 14 July, the fund gained 12.7%. Its growth has slowed over the past six months: in the 12 months to 9 July, the fund gained 52.3%. However, this masks a dramatic slowdown following a rapid start which saw the fund gain 26.5% in the first month-and-a-half of the year (through 16 February).
The Global X Social Media ETF's YTD returns rise
The Facebook share price and the Twitter share price carry heavy influence over the fund’s fortunes, constituting its largest and fourth-largest holdings, respectively, weighted at 11.47% and 6.37% as of 14 July.
Another such fund is the Invesco China Technology ETF [CQQQ] which tracks the FTSE China Incl A 25% Technology Capped Index, and therefore offers investors exposure to the China tech theme. The fund rose 1.9% on 25 June despite the announcement of the clampdown on tech platforms.
The ETF holds neither Facebook nor Twitter, nor any of the other companies represented by the Asia Internet Coalition. However, its top holding as of 14 July, Tencent Holdings [700.HK] is also the second-largest holding in the Global X Social Media ETF. While the 25 June letter didn’t adversely affect the fund, Beijing’s ongoing confrontation with tech platforms has seen it fall 4.3% so far this year to 14 July.