Meta Stock Soars While Twitter Struggles: Analyzing the Threads Launch
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Introduction
The launch of Meta‘s Twitter competitor, Threads, has created a stir in the social media landscape. Within just a few days, Threads gained 100 million users, surpassing the record set by ChatGPT. This achievement not only showcases Meta‘s ability to attract users but also presents an opportunity for the company to capture advertising dollars from Twitter.
Meta‘s Performance Since the Threads Launch
After a turbulent 2022, which included mass layoffs and a step back from the metaverse project, Meta has experienced a significant rebound in 2023. The stock price has surged over 135% year to date, an impressive feat for a mature company in the social media industry.
The launch of Threads has further contributed to Meta‘s success. The day before the launch, Meta‘s stock jumped from $285 to $297. Since then, it has been hovering at a similar level, reflecting a 2.62% increase over the past five days. Despite high expectations, there have been few complaints about the product so far.
The State of Twitter
While Elon Musk spearheaded the takeover of Twitter, he is not the sole financier of the purchase. The $44 billion price paid for the company involved several prominent individuals and organizations, including the Qatar Investment Authority, Saudi Arabia’s Prince Alwaleed bin Talal al Saud, Binance, Andreesen Horowitz, Sequoia Capital, Larry Ellison, Jack Dorsey, and major financial institutions like Bank of America, Morgan Stanley, Fidelity, and Barclays.
However, recent reports suggest that Fidelity has written down the valuation of its stake in Twitter to $15 billion, representing a grim return of -65.9% under Musk’s leadership. This significant loss raises concerns about the future of the social media giant.
Analysis and Outlook
The Threads launch has been a significant boon for Meta and its shareholders. It signifies a course correction back to traditional social media after the metaverse project caused anxiety among investors. Together with the company’s efficiency drive, the launch of Threads appears to stabilize Meta‘s trajectory.
As we move forward in 2023, the social media landscape will be a focal point of observation. The collapse of Twitter and the viability of Threads as a revenue-generating platform will be crucial factors to monitor. Investors should pay close attention to future Meta earnings calls for insights into the company’s performance.
Conclusion
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Overall, the launch of Threads has generated positive momentum for Meta, while Twitter struggles to regain its footing. The future of these companies will undoubtedly be a topic of great interest in the coming months.
is a current affairs commentator and the opinions expressed in this article are his own.
<< photo by Badreddine Farhi >>
The image is for illustrative purposes only and does not depict the actual situation.
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