Breaking News
Close
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Social Networks: Which Shares To Choose After The Recent Drops?

By Investing.com (Francesco Casarella/Investing.com)Stock MarketsMay 26, 2022 10:58
uk.investing.com/analysis/social-networks-which-shares-to-choose-after-the-recent-drops-200519947
Social Networks: Which Shares To Choose After The Recent Drops?
By Investing.com (Francesco Casarella/Investing.com)   |  May 26, 2022 10:58
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

It was news a few days ago that Snap Inc (NYSE:SNAP), a social networking technology company, lost 45% in a single stock market session.

Source: Investing.com
Source: Investing.com

This followed a profit warning from the social media company that showed hard times for a once booming industry, triggering a collapse of the entire sector.

The Social Network Industry

Is the social networking technology industry really destined to go the way of the Nifty-Fifty or the dotcoms?

I would like to start with a quote from Massimo Ruggero of the TV series 'Devils'; "Data is the new oil, but oil sooner or later runs out, data does not..."

Now, these companies, in addition to having countless users, possess billions and billions of data, and information.

As we can see from the screenshot below, as many as 4.62 billion people are social network users. Moreover, the new generations are digital natives, so being registered in some kind of social network is now almost as normal as having a health card.

.

Source: datareportal.com
Source: datareportal.com


Which to bet on?

According to a recent analysis by GWI.com, we see that the most widely used platforms in the world are still owned by Meta Platforms Inc (NASDAQ:FB), followed by WeChat in the fourth position. Therefore, if we were to evaluate companies according to 'market share', Meta Platforms Inc dominates, not surprisingly it is also the largest company in terms of market capitalisation.

Source: datareportal.com
Source: datareportal.com

If, on the other hand, we analyse the valuations with our InvestingPRO tool, Twitter Inc (NYSE:TWTR) currently seems to be the most overvalued (pending an understanding of Musk's intentions). If we then consider that many of these companies are still loss-making (Snap Inc for several years) we realise that the business itself does not offer many choices, i.e. the only company truly able to grow structurally and make a profit to date is almost exclusively Meta Platforms Inc.

Source: InvestingPRO
Source: InvestingPRO

Speaking of Meta Platforms Inc, the stock (which is currently in one of my portfolios) has a potential discount of 80% to its fair value (so the margin is there), and even if we want to be more conservative, the multiples have fallen in just a few months with a P/E of 13.3 and a P/S of 4.29, definitely very good valuations.

Source: InvestingPRO
Source: InvestingPRO

Until next time!

***

If you find my analyses useful, and would like to receive updates when I publish them in real time, click on the FOLLOW button on my profile!

"This article is written for informational purposes only; it does not constitute a solicitation, offer, advice or recommendation to invest as such and is in no way intended to encourage the purchase of assets. I would like to remind you that any type of asset, is valued from multiple points of view and is highly risky and therefore, any investment decision and the associated risk remains with you."

Social Networks: Which Shares To Choose After The Recent Drops?
 

Related Articles

Social Networks: Which Shares To Choose After The Recent Drops?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
DOWNLOAD APPApp store
Investing.com
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
or
Sign up with Email