Welcome to "#SocialStocks," The Fly's weekly recap of Wall Street's reactions to social media stock news.
AR GLASSES EXPECTED TO BE FOCUS OF THE FUTIRE: Big tech companies like Facebook (FB), Apple (AAPL) and (GOOGL,GOOG) are expanding their efforts in the "consumer-focused AR glasses" space, wrote Sarah Needleman and Jeff Horwitz of the Wall Street Journal. Chip-maker Qualcomm (QCOM) and augmented reality or AR firm Niantic are partnering on glasses and Snap (SNAP) which already has its product Spectacles, is developing consumer AR glasses now, added the story. Tech companies reportedly see AR glasses as a way to keep a consumer in their respective ecospheres. Facebook has been working on AR glasses along with sensor-packed wristbands enabled to detect finger movements, part of a larger effort to research the development of software and hardware to support the eyewear. In the meantime, this year Facebook is releasing eyewear with tech capabilities in partnership with EssilorLuxottica SA’s Ray-Ban brand. “To have a chance to potentially pioneer a new era is very exciting,” Andrew Bosworth, VP at Facebook Reality Labs told WSJ. “This is a technology that doesn’t live in my pocket; it lives on my face.” Analysts expect Apple's AR headset to hit the market as soon as next year, and has plans for AR glasses to follow.
ANALYSTS WEIGH IN ON SOCIAL MEDIA STOCKS: Yesterday, Atlantic Equities analyst James Cordwell upgraded Snap to Overweight from Neutral with a $75 price target. Evercore ISI analyst Mark Mahaney assumed coverage of Snap with an Outperform rating and $68 price target. He sees Snap as "a highly differentiated asset in the middle of a powerful product cycle inflection," and as "the definitive leader in Augmented Reality," Mahaney told investors. Mahaney initiated coverage of Pinterest (PINS) with an Outperform rating and $97 price target. The analyst views Pinterest as a "highly differentiated asset in the middle of a powerful product cycle inflection." Evercore ISI analyst Mark Mahaney assumed coverage of Facebook with an Outperform rating and $370 price target. The analyst views Facebook as a leader in digital advertising "with multiple assets at the cusp of major value-unlock." Evercore ISI analyst Mark Mahaney assumed coverage of Twitter with an In Line rating and $75 price target. Though he believes Twitter "may be on the verge" of unlocking accelerating development velocity for both user and advertiser products, he is uncertain about how successful Twitter will be at tapping into performance advertising budgets and sees debate around whether Twitter can reach its multi-year mDAU and revenue goals, Mahaney said.
INTERNAL WORRIES OVER CHINESE PROPAGANDA AT FACEBOOK: Facebook staff have raised concerns internally over allowing Chinese propaganda ads about Xinjiang, as the company awaits the response of organizations like the United Nations to the situation, the Wall Street Journal's Newley Purnell reported, citing people familiar with the matter. Workers have expressed concerns about advertisements and content by Beijing promoting message that mostly Muslim ethnic minorities in the region are thriving, according to the people. The U.S. and some European governments say Beijing is committing genocide against the Uyghurs, citing a campaign that includes political indoctrination, mass internment and forced sterilizations. Facebook hasn’t determined whether to act on the concerns, say people familiar with the matter. The U.N. this week called on companies conducting Xinjiang-linked business to conduct “meaningful human rights due diligence” on their operations. A Facebook spokesman said that the ads taken out by Beijing related to Xinjiang do not violate policies so long as the advertisers follow Facebook’s rules when purchasing them. He said the company is monitoring reports of the situation in Xinjiang “to help inform our approach and due diligence on this issue.”
PINTEREST EYES VSCO: Pinterest has held discussions to acquire VSCO, or Visual Supply Company, a photography app, Mike Isaac and Erin Griffith of the New York Times reported, citing two people with knowledge of the matter. The talks are reportedly still in progress. While a potential deal price was not disclosed, VSCO has raised $90M in funding and was previously valued at $550M. Representatives from both parties decided to not comment on the discussions. Julie Inouye, a spokeswoman for VSCO, said the company was focused on expanding its business. “We’re always meeting with different companies across the creative space at any given time and do not discuss rumors or speculation,” she said. Pinterest also announced earlier the upcoming launch of Creator Code, its content policy intended to keep Pinterest a "positive and inspiring" place. The Code includes a mandatory set of guidelines within Pinterest, intended to educate and build a safe online community that centers around "inclusive and compassionate" content. Creators will be required to review and accept the guidelines before publishing Story Pins, Pinterest's multimedia format.
TWITTER COULD INTEGRATE SHOPPING FEATURE: Twitter (TWTR) said that the company eventually expects its users may have the ability to complete shopping transactions via the service, Reuters reported, citing a press call. Twitter also said it is in the early stages of thinking about how to monetize its audio feature "Spaces." In Wednesday afternoon trading, Twitter shares are up $2.17, or 3%, to $69.17.
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