Welcome to "#SocialStocks," The Fly's weekly recap of Wall Street's reactions to social media stock news.
THATS A PLUS: Snap (SNAP) said it is launching Snapchat+, a collection of exclusive, experimental, and pre-release features available in Snapchat for $3.99/month. "This subscription will allow us to deliver new Snapchat features to some of the most passionate members of our community and allow us to provide prioritized support," the company said. "Snapchat+ will be available at launch in the United States, Canada, the United Kingdom, France, Germany, Australia, New Zealand, Saudi Arabia, and the United Arab Emirates. We'll expand to more countries over time. Just tap Snapchat+ on your Snapchat profile to get started."
Pinterest (PINS) announced that co-founder, CEO and president, Ben Silbermann will transition to the newly created role of executive chairman, and online commerce expert Bill Ready will become CEO and a member of the board of directors, effective June 29. Ready is joining Pinterest from Google (GOOG, GOOGL), where he served as president of commerce, payments & next billion users and oversaw Google's vision, strategy and the delivery of its commerce products. Prior to Google, Ready served in various senior leadership roles at PayPal (PYPL), including executive VP and COO.
Citi analyst Ronald Josey reiterated a Neutral rating on Pinterest with a $24 price target after the news. Given Ready's payments and e-commerce experience, the appointment is a natural expansion of Pinterest building out its full-funnel personalized shopping experience as newer products like the Watch Tab gain traction, Josey told investors in a research note. However, the analyst expects Pinterest's monthly active user pressures to continue. He looks for MAU stabilization and a potential return to user growth before getting constructive on the shares.
Consequently, longtime Google executive Nick Fox will become head of the Alphabet unit's commerce and payments unit on an interim basis, CNBC's Jennifer Elias reported. Fox's appointment comes after Ready's departure. Fox will oversee Google's commerce, payments and next billion users," Elias noted, citing a person familiar with the matter.
THINK OF THE CHILDREN: Facebook parent Meta Platforms (META), TikTok and other social media companies could be sued by California attorneys for allegedly harming children through addiction, The Wall Street Journal's Sarah Donaldson and Christine Mai-Duc reported. A first-in-the-nation bill, which faces a vote in the California state Senate on Tuesday, would permit the state attorney general, local district attorneys and the city attorneys of California's four largest cities to sue social media companies including Meta as well as Bytedance's TikTok, and Snap under the state's law governing unfair business practices, and would allow lawsuits if a prosecutor believes a company employed features it knew or should have known would addict minors. Companies would still face civil penalties of up to $25,000 for a violation or $250,000 if they are shown to have knowingly employed harmful features.
FAKE ACCOUNT DILEMMA: Tesla (TSLA) CEO Elon Musk now has access to the Twitter (TWTR) data that he said was needed to close the $44B buyout, but data scientists and specialists doubt the stream will provide the conclusive answers he seeks about fake accounts, WSJ's Sarah E. Needleman reported. According to people familiar with the matter, Twitter last week agreed to give Musk more information, including real-time API data and access to its "firehose" of tweets, but data analysts and social media specialists say that the nature of the data make it tough for Musk or others to come up with clear findings in a short period that would prove whether or not Twitter's own estimates of fake and spam accounts are accurate. Twitter’s fire hose is a public stream of tweets that contains such a vast amount of finite data that it isn’t practical to analyze it for spam, said Micah Schaffer, a social media consultant on trust and safety issues who previously worked at YouTube and Snap Inc. Making it available to Musk is “more of a shut-up-and-go-away kind of thing than a major concession,” he said. Twitter has reportedly walked Musk through its process for figuring outdaily monetizable users, one of the people familiar with the matter said
.ANALYST COMMENTARY: Wedbush analyst Daniel Ives assumed coverage of Twitter with a Neutral rating and $54 price target.
JPMorgan analyst Doug Anmuth lowered the firm's price target on Pinterest to $26 from $32 and maintained a Neutral rating on the shares. Additionally, Anmuth lowered the firm's price target on Snap to $24 from $26 and kept an Overweight rating on the shares. The analyst reduced estimates and price targets on 26 companies across his interest coverage universe based on macro pressures, currency moves and company-specific dynamics. The overall macro environment has deteriorated since Q1 earnings with inflation reaching a 40-year high in May, fuel costs up 45% since early February, Chase credit card data indicating slowing consumer spending and lower consumer confidence, Anmuth told investors in a research note. Additionally, JPMorgan models suggest a 66% chance of recession over the next two years and an 83% chance over the next three years, said the analyst. Anmuth believes the Internet sector continues to have secular growth, but adds that it is far more mature than in 2008-2009, and the ability to offset broader, macro trends is more limited. However, he thinks buy-side expectations and many equity prices "already reflect a softer macro environment." Amazon (AMZN), Booking Holdings (BKNG) and Uber Technologies (UBER) remain his best ideas.
Snap
+0.09 (+0.66%)
+0.03 (+0.15%)
Alphabet
-6.1 (-0.27%)
Alphabet
-8.12 (-0.36%)
Meta Platforms
+2.93 (+1.82%)
Tesla
-12.78 (-1.83%)
-0.89 (-2.29%)
Amazon.com
+1.91 (+1.78%)
Booking Holdings
-25.91 (-1.41%)
Uber
-0.645 (-2.92%)