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Why Social Media Stocks TWTR, SNAP, and PINS Are Up


Aug. 13 2019, Updated 12:42 p.m. ET

Except for Facebook (FB), major social media stocks are mostly up. Twitter (TWTR), Snap (SNAP), and Pinterest (PINS) have risen in the last month. Can they hold on to their gains?

Facebook has bucked the broader social media sector’s gains. Its shares are down around 9.52% in the last month as of August 12. The noise surrounding its Libra cryptocurrency, the Federal Trade Commission’s $5.0 billion fine and investigation, the US Department of Justice’s antitrust probe, and an expected EU privacy fine have made investors skittish about Facebook. But all isn’t lost: the company is planning a huge campaign to improve its corporate image. Its audience also continues to expand, meaning that it remains the top provider for brands seeking wider reach. Facebook has also begun addressing the concerns some advertisers have raised with its service.

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Strong earnings results continue to propel Twitter

Twitter shares are up around 7.20% in the last month as of August 12. The company’s strong second-quarter results have given it a huge boost. Twitter’s second-quarter revenue and audience metrics both increased from a year ago and exceeded consensus estimates. Its expanding user base puts it on solid footing in terms of attracting more ad dollars. The advertising business contributes the bulk of Twitter’s ad revenue.

Square (SQ), the other company run by Twitter CEO Jack Dorsey, is down 24.30% in the last month as of August 12.

Snap and Pinterest soar on impressive earnings results

Shares of Snap, Snapchat’s parent, are up around 7.75% in the last month as of August 12. Snap stock is also up after the company reported strong second-quarter results. Investors have rallied behind Snap’s move to replenish its cash reserve. The company recently embarked on a fundraising process that it expects to net it over $1.0 billion in additional cash. Snap says it could use the new cash for a variety of activities, including acquisitions. Social media companies use acquisitions to rapidly expand and diversify their businesses. For example, through its acquisition of Oculus, Facebook has diversified into the hardware business.

Pinterest shares are up more than 27.34% in the last month through August 12, making it the top-gaining major US social media stock on our watch list. Strong second-quarter results mostly helped propel Pinterest stock. Investors have also celebrated Pinterest’s move to raise its revenue guidance for 2019.


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