Nextdoor SPAC Deal Set to Infuse Juice into Social Media Stocks (FB, TWTR, CMGR, SNAP, PINS, SOCL)

Traders and investors should expect the social media space to regain the spotlight following yesterday’s news that growth juggernaut Nextdoor – the hyperlocal neighborhood social network – is getting set to go public.

The deal is expected to be worth $4-5 billion and will happen via SPAC (sponsored by Khosla Ventures). According to Axios, when the proposed transaction closes, Nextdoor will be listed under ticker symbol “KIND.”

There’s plenty to be excited about for investors. The social media boom continues to roll on unabated, benefitting from the continued migration of advertising, marketing, and branding dollars from television, print, radio, and physical media into the far more effective social media model, particularly on the influencer-based side of the equation.

We can expect Nextdoor to function as another avenue for that same migration.

This isn’t TikTok, but it’s hardly insignificant, and will likely infuse some juice into stocks in the space, such as Facebook, Inc. (NASDAQ:FB), Twitter Inc (NYSE:TWTR), Clubhouse Media Group Inc (OTC US:CMGR), Snap Inc (NYSE:SNAP), Pinterest Inc (NYSE:PINS), and Global X Social Media ETF (NASDAQ:SOCL). We drill down into a few of these names below.

 

Twitter Inc (NYSE:TWTR) bills itself as a global platform for public self-expression and conversation in real time. It provides a network that connects users to people, information, ideas, opinions, and news. 

The company’s services include live commentary, live connections, and live conversations. Its application provides social networking services and micro-blogging services through mobile devices and the Internet. The company can also be used as a marketing tool for businesses. 

Twitter Inc (NYSE:TWTR) recently announced the appointment of Mimi Alemayehou to the Company’s Board of Directors as a new independent director, effective immediately.

“Mimi’s extensive experience overseeing growth in emerging markets in both the public and private sectors will be invaluable as we advance Twitter’s mission to serve the public conversation across the world,” said Patrick Pichette, independent chair of the Twitter Board. “Mimi shares our commitment to social responsibility and strengthening global communities, and we’re eager to benefit from her perspective and regional expertise as we expand Twitter’s presence to Ghana and invest in improving our service across Africa and other regions.”

The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 2% in that timeframe. Shares of the stock have powered higher over the past month, rallying roughly 17% in that time on strong overall action. 

Twitter Inc (NYSE:TWTR) generated sales of $1B, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of -19.6% on the top line. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($8.8B against $2B).

 

Clubhouse Media Group Inc (OTCMKTS:CMGR) is probably already the top player in the social media influencer-based marketing space. The company’s principal asset is its massive social media reach, now surpassing 300 million aggregate followers. This doesn’t appear on the company’s balance sheet, but it helps to justify the notion that the stock is undervalued at present levels. 

According to company communications, this number is growing rapidly as well, having doubled in the past six months after doubling in the prior three months before that. The extrapolation process doesn’t take long to get to over a billion.

Clubhouse Media Group Inc (OTCMKTS:CMGR) recently gave more details about this data as well as how the company is working to monetize it in the quarters ahead.

Chris Young, Co-Founder and President of Clubhouse Media, noted in the company’s latest release, “We are also working on a new membership model that would permit affiliate influencers to collaborate within our physical spaces and create new relationships. This may allow us to continue the rapid expansion of our reach and develop the equivalent of a “Soho House” for influencers, while improving our bottom line by maximizing usage of our physical studios and developing new influencer relationships. We are excited to be at the forefront of this new business model and to be the mavens in this space.”

We will also note that, according to its release, Clubhouse Media has recently begun to monetize its accessible social media reach through signed branding and marketing deals. The Company has already forged partnerships and branding deals with many top global brands, including Sony Music Entertainment, Spotify, Champion, Fashion Nova, Hilton Hotel Group, CoverGirl, Honda Motors, and Revolve, among many others.

Clubhouse Media Group Inc (OTCMKTS:CMGR) also notes that it is working toward the development of in-house consumer products to be branded through the large social media influencer-based marketing infrastructure it has now established. That would be a huge step given the massive implications for upside and margins from such a shift in terms and model.

 

Snap Inc (NYSE:SNAP) frames itself as a company that engages in the operation of its camera platform. Its products include Snapchat, using the camera and editing tools to take and share Snaps, Friends Page, which lets users create and use Stories, Groups, Video and Chat, Discover for searching and surfacing relevant Stories, Snap Map, which shows friends, Stories and Snaps near the user, Memories, for saving personal collections, and Spectacles, wearable sunglasses capable of taking Snaps and interacting directly with the Snapchat application.

The firm’s primary source of revenue is advertising. 

Snap Inc (NYSE:SNAP) recently announced that Darcie Henry will join the company as Chief Human Resources Officer (CHRO) on July 6, 2021, reporting to CEO Evan Spiegel. The appointment follows Snap’s current Chief People Officer Lara Sweet’s decision in March 2021 to retire.

“Darcie’s experience leading large, rapidly growing teams around the world will be a tremendous asset to Snap, and her humble, kind approach is the perfect fit for our culture,” commented Mr. Spiegel. “We are confident that Snap will benefit from her many talents and we can’t wait for her to get started.”

The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 4% in that timeframe. Shares of the stock have powered higher over the past month, rallying roughly 13% in that time on strong overall action. 

Snap Inc (NYSE:SNAP) generated sales of $769.6M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of -15.6% on the top line. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($2.6B against $751.9M).

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Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email (alanmasterson@wallstreetpr.com) or his Google+ page (https://plus.google.com/103338576216002376250).

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