Meta has announced its first-ever dividend ahead of Facebook’s 20th anniversary, sending its share price soaring. Here is a collection of social media stocks to watch.
- Snap is laying off 10% of its global workforce as it focuses investment on top-line growth.
- Pinterest has announced an ad partnership with Google, similar to an existing one with Amazon.
- Match Group has drawn investment from activist Elliott Management, which has built a $1bn stake.
The First-Ever Dividend Stock
Meta Platforms’ [META] share price surged earlier this month with a record $196bn single-session gain. This followed the Facebook parent declaring its first-ever dividend of $0.50 per share, sending its share price up approximately 20%. CEO Mark Zuckerberg is expected to receive a pay-out of $700m from the 350 million shares he holds in the company. The Meta share price is up 55.2% in the past six months.
The Growth Concerns Stock
Snap [SNAP] is cutting approximately 10% of its global workforce, it was announced last week. “[W]e have made the difficult decision to restructure our team while continuing our investments in our highest priorities, including improved top-line growth,” said Snap CEO Evan Spiegel on the company’s Q4 2023 earnings call last week. Revenue was up 5% year-over-year in the three months to the end of December, missing Wall Street expectations and sending the Snap share price tumbling 34% the following day. The stock is up 10.8% over the past six months.
The Ad Partnership Stock
Pinterest [PINS] announced a third-party integration with Google [GOOGL] last week, similar to an existing deal with Amazon [AMZN]. “The partnership will focus on monetising several of our currently unmonetised international markets by enabling ads to be served on Pinterest via Google’s Ad Manager,” said CEO Bill Ready on Pinterest’s Q4 2023 earnings call last week. Its share price tumbled more than 11% on 9 February on the back of a quarterly revenue miss and weak guidance for 2024.
The Scrapped Acquisition Stock
Baidu [BIDU] abandoned plans to acquire Chinese streamer Joyy [YY] for $3.6bn on 1 January. According to a regulatory filing, Joyy had failed to fulfil certain conditions by the end of 2023. The deal, first announced back in November 2020, would have seen Baidu “receive immediate operational experience and knowhow for large-scale video-based social media development”, as well as access to an extensive network of creators.
The Activist Investor Stock
Match Group [MTCH] has drawn investment from Elliott Investment Management, which has built a $1bn stake in the company. According to a Reuters report last month, the activist investor will push the Tinder owner to make changes to revive its languishing share price, which fell to a 52-week low in November. Speaking on the Q4 2023 earnings call last month, CFO Gary Swidler said Match could get a boost from Apple’s [AAPL] app store fee policy changes announced in the EU. “We expect any savings that we achieve from Apple's changes will help us meet or exceed our margin objective for the year,” said Swidler.
Another Way to Invest in Social Media
The Global X Social Media ETF
The Global X Social Media ETF [SOCL] holds all five stocks. As of 31 January, communication services has an allocation of 96.9% while information technology and consumer discretionary account for 2.4% and 0.6% respectively. The fund is up 9.9% in the past year and up 6% in the past six months.
The VanEck Social Sentiment ETF [BUZZ] holds Meta and Snap. As of 31 January, information technology and consumer discretionary account for 31% and 20.4% of the portfolio, while financials and communication services have allocations of 16.8% and 13.6%. Industrials, healthcare, energy and real estate have single digit weightings. The fund is up 35.4% in the past year and up 20% in the past six months.
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