Welcome to "#SocialStocks," The Fly's weekly recap of Wall Street's reactions to social media stock news.
TWITTER LATEST: Tesla (TSLA) CEO Elon Musk has appealed a judge's refusal to halt his 2018 agreement with the SEC that requires a Tesla lawyer to screen his posts on Twitter (TWTR), saying the SEC is undermining his constitutional right to free speech and using the decree to launch "endless, boundless investigations of his speech," Reuters' Jonathan Stempel reported. The agreement stemmed from an SEC lawsuit claiming that Musk defrauded investors by tweeting on August 7, 2018 that he had "funding secured" to take the company private. According to a court filing, Musk will ask the 2nd U.S. Circuit Court of Appeals in Manhattan to reverse the April 27 decision by U.S. District Judge Lewis Liman allowing his consent decree with the SEC to stand. read more The SEC declined to comment. Musk is currently seeking to buy Twitter for $44B.
Musk will address Twitter employees and take questions at a company-wide virtual meeting on Thursday morning, marking the first time he will meet with employees since announcing plans to buy the company in April, Bloomberg's Edward Ludlow and Kurt Wagner reported. Musk will reportedly take questions from Twitter employees. during the meeting.
At a company-wide meeting Wednesday, Tesla staff asked CEO Elon Musk what to do with the all of the noise surrounding his attempt to acquire Twitter, to which he responded they should "ignore" it, Electrek's Fred Lambert reported. Musk also said during the meeting that he is aiming for roughly 80% of Americans to be on the social media platform, Lambert said. "In the case of Twitter, it's about how can we assure that there's a digital town square that is inclusive and as trusted as possible and where ideally, I don't know, 80% of Americans are on it," Musk said. "They can speak their minds with reasonable freedom." Lambert notes that roughly 25% of adults in the U.S. reportedly use Twitter.
CONTENT DEAL: Pinterest (PINS) has signed a multimillion-dollar, multiyear deal with Tastemade that will result in 50 new TV shows, live videos and events, Sara Fischer and Kerry Flynn of Axios reported. Malik Ducard, who joined Pinterest as chief content officer in October, said that "This is the most significant partnership I'm announcing as part of my time and tenure with the company." Tastemade will produce 50 new shows on Pinterest that will have about 20 episodes each, Tastemade CEO Larry Fitzgibbon said. In-person events for creators will be held at Tastemade studios including Los Angeles; Jakarta, Indonesia; and São Paulo. Financial terms of the deal were not disclosed.
IN WITH THE NEW: Shares of Meta Platforms began trading on Nasdaq last week under the ticker symbol (META). This replaces the company's previous symbol (FB), which had been used since its initial public offering in 2012. "The new ticker symbol aligns with the company's rebranding from Facebook to Meta," the company previously said. Shares of Meta were down $1.13 to $195.51 in Thursday morning trading.
OUT WITH THE OLD: Meta has halted development of a smartwatch with dual cameras, which was in development for two years, and is instead working on other wrist devices, Wagner reported, citing a person with knowledge of the matter. Meta executives have discussed the potential of smartwatches as part of its vision for the metaverse, the report noted. The smartwatch would have competed with the Apple Watch (AAPL).
FAKE IT UNTIL YOU MAKE IT: Alphabet unit Google (GOOGL), Meta Platforms unit Facebook, Twitter and other tech companies will have to take measures to counter deepfakes and fake accounts on their platforms or risk hefty fines, according to Reuters' Foo Yun Chee, citing people familiar with the matter. The measure is part of the European Commission's updated code of practice on disinformation which the EU executive will publish on Thursday as it continues its fight against fake news, the people said. The new code provides examples of manipulative behavior such as deepfakes and fake accounts which the signatories will have to grapple with. "Relevant signatories will adopt, reinforce and implement clear policies regarding impermissible manipulative behaviors and practices on their services, based on the latest evidence on the conducts and tactics, techniques and procedures (TTPs) employed by malicious actors," the document said.
SHIPPING OUT: David Mortenson, Meta's top engineering leader overseeing its data centers and core infrastructure, is leaving the company following recent departures of COO Sheryl Sandberg and head of AI Jerome Pesenti, The Verge's Alex Health reported, citing an internal memo. Santosh Janardhan, one of Mortenson's direct reports and current VP of engineering, will take on the position later this month, the author says.
ANALYST COMMENTARY: Goldman Sachs analyst Eric Sheridan lowered the firm's price target on Pinterest to $24 from $35 and maintained a Neutral rating on the shares. The analyst cut revenue and EBITDA forecasts to take a more conservative view on the broader digital advertising sector. He also sees Pinterest being overexposed to categories like apparel that could see lower advertising spend in the near-to-medium term.
Additionally, Sheridan lowered the firm's price target on Snap (SNAP) to $25 from $60 and reiterated a Buy rating on the shares. The analyst cut forward operating estimates as he views Snap as being more exposed to a range of macro headwinds given its less diverse advertiser base and sector exposure.
Piper Sandler analyst Thomas Champion kept a Neutral rating and $220 price target on Meta Platforms ahead of the firm's inaugural Bull vs. Bear debate, stating that while it is an impressive company with best ad-tech and scale, it also faces headwinds from further privacy issues and TikTok competition. The bears may argue that Meta has had three consecutive quarters of missing consensus expectations and its ad pricing may remain under pressure amid usage headwinds, though bulls would likely point to the company's revenue expectations having come down sooner than those of its peers and that Meta may be in better position to beat and raise going forward, Champion told investors in a research note.
Tesla
+38.51 (+5.81%)
+0.81 (+2.17%)
+2.055 (+11.96%)
Meta Platforms
+7.11 (+4.34%)
Apple
+3.85 (+2.90%)
Alphabet
+86.76 (+4.05%)
Alphabet
+84.4 (+3.96%)
Snap
+1.415 (+11.87%)