The social media revolution may seem like old news. But it could also just be getting started. The key point to appreciate here is “influence” – influence over public opinion and consumer decisions.
Given that many of the top players in this space have access to hundreds of millions of people, and given that they have control over what messaging hits those eyeballs (through one mechanism or another), that ability to reach so many people offers up endless avenues for innovative monetization.
For example, social media platforms are marketing platforms. The businesses thrive on driving eyeballs toward profitable ideas, products, services, or concepts. In basic terms, whoever owns the channel owns the future. Whatever it’s made of.
E-commerce is a good example. E-commerce players, like platforms on Shopify Inc (NYSE:SHOP), have to spend oodles of money to gain attention to sell their wares. This is increasingly an opportunity for social media players to gobble up. As e-commerce grows, likely so does social media marketing – particularly influencers with high brand recognition and large followings.
This has major implications for stocks in the space like Facebook, Inc. (NASDAQ:FB), Pinterest Inc (NYSE:PINS), Clubhouse Media Group Inc (OTC US:CMGR), Snap Inc (NYSE:SNAP), Microsoft Corporation (NASDAQ:MSFT), Twitter Inc (NYSE:TWTR), and Global X Social Media ETF (NASDAQ:SOCL).
We take a closer look at some of the more interesting recent catalysts in the space below.
Facebook, Inc. (NASDAQ:FB) is an obvious key player in this narrative. The company operates as a social networking megacap giant, creating social media applications for people to connect through mobile devices, personal computers, and other surfaces. It enables users to share opinions, ideas, photos, videos, and other activities online.
The firm’s products include Facebook, Instagram, Messenger, WhatsApp, and Oculus. It is the biggest social media company in the world, with billions of active users in most countries on the planet every day.
Facebook, Inc. (NASDAQ:FB) recently reported financial results for the quarter ended June 30, 2021, including key stats on performance: DAUs were 1.91 billion on average for June 2021, an increase of 7% year-over-year, Facebook monthly active users (MAUs) – MAUs were 2.90 billion as of June 30, 2021, an increase of 7% year-over-year, and Capital expenditures, including principal payments on finance leases, were $4.74 billion for the second quarter of 2021.
“We had a strong quarter as we continue to help businesses grow and people stay connected,” said Mark Zuckerberg, Facebook founder and CEO. “I’m excited to see our major initiatives around creators and community, commerce, and building the next computing platform coming together to start to bring the vision of the metaverse to life.”
It will be interesting to see if the stock can break out of its recent sideways action. Over the past week, the stock is net flat, and looking for something new to spark things. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -2%.
Facebook, Inc. (NASDAQ:FB) managed to rope in revenues totaling $29.1B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 55.6%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($64.3B against $14.9B).
Clubhouse Media Group Inc (OTC US:CMGR) is particularly interesting here because it is the only publicly traded pure play on the concept of social media influencer-based marketing. In other words, this isn’t a social media platform, but a marketing company that has already cultivated a massive following over a range of social media platforms through its network of high-profile social media influencer stars.
As of July 10, 2021, the Company’s total aggregate global social media reach stood at just over 400 million, with approximately 290 million followers on TikTok, 51.7 million followers on Instagram, 56 million followers on YouTube, 2.6 million followers on Snapchat, and 2 million followers on Twitter.
Clubhouse Media Group Inc (OTC US:CMGR) recently announced the upcoming airing of a six-part TV series on FMW Media’s “New To The Street” business TV show, which is set to feature interviews with Clubhouse Media president and co-founder Chris Young.
According to the company’s release, Jane King, host of New to The Street, will interview Young over the course of the series to cover Clubhouse Media’s unique influencer-based model, including what the Company is doing to maintain its strong growth rate and monetize its large global following.
Young remarked, “We are excited about the chance to leverage New To The Street’s syndicated platform and strong reach to help educate viewers about Clubhouse Media’s growing value proposition and the powerful market opportunity we are targeting. I look forward to the opportunity to give viewers a greater understanding of our social media influencer-based solutions and the interest they have generated with superstars and celebrities in the sports, music, and entertainment domains, as well as our strategic vision and where we are taking the Company next.”
Clubhouse Media Group Inc (OTC US:CMGR) is in the process of its initial stage of full commercialization and the monetization of its massive global social media influencer reach. We can expect a number of potentially very interesting catalysts to emerge over coming weeks pointing to how the company plans to pick up its chips off the table. The interesting idea here is that it has already achieved the hard part of a big equation – in cultivating nearly a half-billion followers. Monetizing that might just be the easy part. But the market is still letting the stock sell down into the basement, which could spell opportunity.
Snap Inc (NYSE:SNAP) bills itself as a company that engages in the operation of its camera platform, which forms the basis for its global social media brand.
The company’s 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.
Snap Inc (NYSE:SNAP) recently announced financial results for the quarter ended June 30, 2021, including news that revenue increased 116% to $982 million in Q2 2021, compared to the prior year, net loss improved 53% to $(152) million in Q2 2021, compared to the prior year, and adjusted EBITDA improved 223% to $117 million in Q2 2021, compared to the prior year.
“Our second quarter results reflect the broad-based strength of our business, as we grew both revenue and daily active users at the highest rates we have achieved in the past four years,” said Evan Spiegel, CEO. “We are pleased by the progress our team is making with the development of our augmented reality platform, and we are energized by the many opportunities to grow our community and business around the world.”
And the stock has been acting well over recent days, up something like 4% in that time. SNAP shares have been relatively flat over the past month of action, with very little net movement during that period.
Snap Inc (NYSE:SNAP) managed to rope in revenues totaling $982.1M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 116.2%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($3.5B against $748.1M).
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