Black Thursday for Social Media Stocks: Snap, Twitter, Pinterest crash on Facebook parent earnings fail
- Facebook stock is down around 25% on Thursday.
- Snap shares are down more than 17%.
- Twitter shares are down 6.2%.
- Pinterest stock is down 7.9%.
Wednesday's Q4 earnings miss by Meta Platforms (FB), the parent of Facebook, Instagram and Whatsapp, is polluting the entire social media ecosystem on Thursday. And not just a little. With Meta stock dropping 25% and losing more than $200 billion in the process, what some say is the greatest dollar value loss by a single equity in stock market history, every nook and cranny of the social media landscape is crashing along with their godfather.
Meta's 4% earnings miss hurt sentiment, but when it guided for first quarter revenue growth of between 3% and 11%, the worries mounted. The drop in daily active users (DAUs) was the head shot. DAUS dropped from the third quarter for the first time in the social media giant's 18-year history. DAUs were reported at 1.929 billion versus the previous quarter's 1.93 billion. Monthly active users (MAUs) also came up about 40 million short of expectations.
Facebook executives put the blame for the growth slowdown on competition from YouTube and TikTok, a new policy by Apple that makes it harder for advertisers to collect important user data and a generally poor environment for advertising.
Snap Stock Forecast: headed to $20.60
Snap (SNAP) shares have been under the weather for more than three months now, and Thursday's 18.8% drop is yet another gut punch for investors. Thursday's decline is reminiscent of the previous plunge on October 22. That session was a much worse 26.6% drop.
At this point, SNAP has lost most of its pandemic gains. It is now trading at July 2020 levels, and shares have dropped a whopping 69% from its all-time high. In fact, SNAP shares are trading at the same level of their IPO day, five years ago on March 2, 2017. Let that sink in.
Still shares seem ready to keep falling. The Moving Average Convergence Divergence (MACD) indicator was ready to cross over earlier this week, but today's price action has ended all bullish notions. The stock now seems headed for $20.60 – the bottom of the pullback in August 2020.
SNAP 1-day chart
Pinterest Stock Forecast: support at $17.75
Pinterest (PINS) shares are down a comparably less dire 7.9% at $25.17 on Thursday. This is partly due to the fact that Pinterest is the most beaten down stock of the lot. Since its February 2021 high of $89.90, PINS has lost 72% of its share price and much more compared to Snap going into Thursday's session.
The current share price in the low $25 region is touching support from October 2019 and then resisistance from February and July 2020. If it drops below here in subsequent weeks, investors can expect a fall to $17.75, the low from December 2019.
PINS 1-day chart
Twitter Stock Forecast: shares migh hold onto $34
Twitter (TWTR) shares are down 6.2% on Thursday at $34.35. Always the odd one out, Twitter is unlike its social media brethren by currently sitting on support from just a week ago. This support may very well hold as expectations for Twitter are much reduced compared to the competition. Afterall, TWTR stock has been a relative failson for years.
If the region around $34 fails to hold, TWTR may sink to support from June 2020 at $28.23. The stock is down 57.5% from its all-time high in February 2021.
TWTR 1-day chart
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Author
Clay Webster
FXStreet
Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.
