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Invest in Social Media

Social Media is the moniker given to websites and applications that allow people to communicate with one another on a network. From large, well-known social media brands like Facebook and Twitter to companies focused on niche areas like online dating, social media’s rise in popularity and the resulting market valuations have been outstanding to say the least.

According to a study conducted by Pew research, social media usage by the public stood at a measly 5% in 2005. By 2015, those active on social media surged to a whopping 67%.

social networking graph
Source: Pew Research Center

Unsurprisingly, Facebook and YouTube (a Google company) are the undisputed kings of social media.

social media graph
Source: Pew Research Center

Social Media

The following breaks down the percentage(s) of adults across various demographics who use at least 1 form of social media platform regularly:

  • 88% for ages 18 – 29
  • 78% for ages 30 – 49
  • 64% for ages 50 – 64
  • 37% for ages 65 +

With a total addressable market of literally everyone (at least with an internet connection), there is no surprise that investors have flocked in droves to pour money into this industry.

However, with this massive rise in popularity has come harsh criticism.

The Cambridge Analytica scandal of 2018 brought with it increased concerns about privacy as Facebook’s CEO, Mark Zuckerberg, was drilled by both the US and EU governments in relation to how our data is used. Numerous former founders/executives of social media companies have condemned the use of social media describing the technology as dopamine-driven and exploitative of human psychology. Marc Benioff, the CEO of Salesforce, has called social media the equivalent of an addiction to cigarettes and should be regulated as such. And according to a recent Pew Research survey, at least 50% of social media users across various demographics stated that “it would not be hard to quit social media”. Combine these issues with ongoing calls for more stringent regulation and the fierce “free speech” debate, companies in the social media industry have faced much backlash over the last few years.

All that said, the social media industry continues to experience both rising popularity and rapid growth.

 

Major Developments

  • Snapchat’s (NASDAQ: SNAP) stock surged a cool 44% from its IPO price of $17 during its first day of trading in the Spring of 2017 (the stock has fallen from grace since its debut). Snap also was the first company in history to have an IPO with shares in the offering holding no voting rights (we’re not a fan of this at all and only goes to show the hysteria around social media companies)
  • Video app, Tiktok (a ByteDance company), has become the hottest social media brand over the last couple of years, registering over 500 million users worldwide since its founding in 2016.
  • President Trumps heavy-handed use of it aside, Twitter (NASDAQ: TWTR) has experienced a remarkable stock price performance. Trading at $16 a share on the day he took office and by $45 a share by the summer of 2018, Twitter has squashed the performance of its social media rivals Facebook and Snapchat, returning almost 300% during this time frame (though the stock has become increasingly volatile since then).
  • Social media company Reddit is rumored to be considering an IPO and Pinterest (PIN) went public in the Spring of 2019.

The Future

As polarizing as the industry can be, social media has solidified itself as an integral part of our daily lives.

The number of social media users worldwide is expected to eclipse an extraordinary 3 billion people by 2021, roughly 40% of the entire human population. This impressive growth has spawned more niche social media companies and has given older companies the confidence to enter the public markets, like popular brands Pinterest, who went public in 2019, and Reddit, who is rumored to be considering an IPO.

As smartphones become more ubiquitous and as the percentage of the human population connected to the internet grows, social media will flourish.

Social Media Stocks

Industry: Internet Content & Information

Sector: Communication Services

Website: http://investor.fb.com

Description: Facebook, Inc. develops products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and in-home devices worldwide. The company’s products include Facebook that enables people to connect, share, discover, and communicate with each other on mobile devices and personal computers; Instagram, a community for sharing photos, videos, and private messages; Messenger, a messaging application for people to connect with friends, family, groups, and businesses across platforms and devices; and WhatsApp, a messaging application that is used by people and businesses to communicate in a private way. It also provides Oculus, a hardware, software, and developer ecosystem, which allows people to come together and connect with each other through its Oculus virtual reality products. Facebook, Inc. was founded in 2004 and is headquartered in Menlo Park, California.

Fundamentals
Market cap$891.58B
P/E ratio31.03
Earnings per share$10.09
Return on equity25.42%
Profit margin33.90%
Total revenue$85.96B
Debt / Equity8.71
Price / Book6.95
52 week high$314.25
52 week low$168.34
Shares outstanding$2.40B
Previous close$306.26
Dividend Analysis
Dividend yield0.00%
Payout ratio0.00%
Trailing Annual Dividend Rate$
Five Year Avg Dividend Yield0.00%
Ex-Dividend date0

Industry: Internet Content & Information

Sector: Communication Services

Website: http://www.snap.com

Description: Snap Inc. operates as a camera company in the United States and internationally. The company offers Snapchat, a camera application that helps people to communicate through short videos and images called Snaps. It also provides Camera, a tool to personalize and add context to Snaps; Chat that allows creating and watching stories, chatting with groups, making voice and video calls, and communicating through a range of contextual stickers and Bitmojis; and Discover that helps surfacing the stories and shows from publishers, creators, and the community based on a user’s subscriptions and interests. In addition, the company offers Snap Map, which brings to a live map of individual location, showing nearby friends, popular stories, and a heatmap of recent snaps posted; Memories that allows users to choose to save the Snaps they create in a searchable personal collection, and users to create Snaps and stories from their saved Snaps and camera roll; and Spectacles, a hardware product that connects with Snapchat and captures video from a human perspective. The company was formerly known as Snapchat, Inc. and changed its name to Snap Inc. in September 2016. Snap Inc. was founded in 2010 and is headquartered in Santa Monica, California.

Fundamentals
Market cap$90.84B
P/E ratio
Earnings per share$ -0.65
Return on equity-41.17%
Profit margin-37.69%
Total revenue$2.51B
Debt / Equity85.99
Price / Book38.86
52 week high$73.59
52 week low$12.44
Shares outstanding$1.25B
Previous close$56.88
Dividend Analysis
Dividend yield0.00%
Payout ratio0.00%
Trailing Annual Dividend Rate$
Five Year Avg Dividend Yield0.00%
Ex-Dividend date0

Industry: Internet Content & Information

Sector: Communication Services

Website: http://www.pinterest.com

Description: Pinterest, Inc. provides visual discovery engine in the United States and internationally. The company’s engine allows people to find inspiration for their lives, including recipes, style and home inspiration, DIY, and others. It shows them visual recommendations based on people personal taste and interests. The company was formerly known as Cold Brew Labs Inc. and changed its name to Pinterest, Inc. in April 2012. Pinterest, Inc. was founded in 2008 and is headquartered in San Francisco, California.

Fundamentals
Market cap$52.67B
P/E ratio
Earnings per share$ -0.21
Return on equity-6.02%
Profit margin-7.58%
Total revenue$1.69B
Debt / Equity8.16
Price / Book23.41
52 week high$89.90
52 week low$15.82
Shares outstanding$532.42M
Previous close$83.29
Dividend Analysis
Dividend yield0.00%
Payout ratio0.00%
Trailing Annual Dividend Rate$
Five Year Avg Dividend Yield0.00%
Ex-Dividend date0

Industry: Internet Content & Information

Sector: Communication Services

Website: http://www.twitter.com

Description: Twitter, Inc. operates as a platform for public self-expression and conversation in real time United States, Japan, and internationally. The company offers Twitter, a platform that allows users to consume, create, distribute, and discover content. It also provides promoted products and services, such as promoted tweets, promoted accounts, and promoted trends, which enable its advertisers to promote their brands, products, and services. In addition, the company offers MoPub, a mobile-focused advertising exchange that combines ad serving, ad network mediation, and a real-time bidding exchange into one monetization platform; Twitter Audience platform, an advertising offering that enables advertisers to extend advertising campaigns; Developer and Enterprise solutions, a software-as-a-service platform that enables developers to build products on Twitter; and paid enterprise access for its public data streams. Twitter, Inc. was founded in 2006 and is headquartered in San Francisco, California.

Fundamentals
Market cap$55.06B
P/E ratio
Earnings per share$ -1.44
Return on equity-13.62%
Profit margin-30.56%
Total revenue$3.72B
Debt / Equity56.26
Price / Book6.87
52 week high$80.75
52 week low$25.06
Shares outstanding$798.15M
Previous close$67.00
Dividend Analysis
Dividend yield0.00%
Payout ratio0.00%
Trailing Annual Dividend Rate$
Five Year Avg Dividend Yield0.00%
Ex-Dividend date0

Industry: Internet Content & Information

Sector: Communication Services

Website: http://www.yelp.com

Description: Yelp Inc. operates a platform that connects consumers with local businesses in the United States and internationally. The company’s platform covers various local business categories, including restaurants, shopping, beauty and fitness, health, and other categories, as well as home, local, auto, professional, pets, events, real estate, and financial services. It provides free and paid advertising products to businesses, which include cost-per-click search advertising and multi-location ad products, as well as enables businesses to deliver targeted search advertising to local audiences; and business listing page products. The company also offers other services comprising Yelp Reservations that provide online reservations for restaurants, nightlife, and other venues directly from their Yelp business listing pages; Yelp Waitlist, a subscription-based waitlist management solution that allows consumers to check wait times and join waitlists remotely, as well as businesses to manage seating and server rotation; Yelp Knowledge program that offers business owners local analytics and insights through access to its historical data and other proprietary content; and Yelp Fusion, which offers free and paid access to content and data for consumer-facing enterprise use through publicly available APIs. In addition, it provides content licensing, as well as allows third-party data providers to update and manage business listing information on behalf of businesses. The company offers its products directly through its sales force; indirectly through partners; and online through its website, as well as non-advertising partner arrangements. It has strategic partnership with Grubhub for providing consumers with a service to place food orders for pickup and delivery. Yelp Inc. was incorporated in 2004 and is headquartered in San Francisco, California.

Fundamentals
Market cap$3.04B
P/E ratio
Earnings per share$ -0.27
Return on equity-2.41%
Profit margin-2.22%
Total revenue$872.93M
Debt / Equity23.42
Price / Book3.57
52 week high$43.86
52 week low$17.84
Shares outstanding$74.93M
Previous close$40.82
Dividend Analysis
Dividend yield0.00%
Payout ratio0.00%
Trailing Annual Dividend Rate$
Five Year Avg Dividend Yield0.00%
Ex-Dividend date0

Industry: SoftwareInfrastructure

Sector: Technology

Website: http://www.microsoft.com

Description: Microsoft Corporation develops, licenses, and supports software, services, devices, and solutions worldwide. Its Productivity and Business Processes segment offers Office, Exchange, SharePoint, Microsoft Teams, Office 365 Security and Compliance, and Skype for Business, as well as related Client Access Licenses (CAL); Skype, Outlook.com, OneDrive, and LinkedIn; and Dynamics 365, a set of cloud-based and on-premises business solutions for small and medium businesses, large organizations, and divisions of enterprises. Its Intelligent Cloud segment licenses SQL and Windows Servers, Visual Studio, System Center, and related CALs; GitHub that provides a collaboration platform and code hosting service for developers; and Azure, a cloud platform. It also offers support services and Microsoft consulting services to assist customers in developing, deploying, and managing Microsoft server and desktop solutions; and training and certification to developers and IT professionals on various Microsoft products. Its More Personal Computing segment provides Windows original equipment manufacturer (OEM) licensing and other non-volume licensing of the Windows operating system; Windows Commercial, such as volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings; patent licensing; Windows Internet of Things; and MSN advertising. It also offers Surface, PC accessories, PCs, tablets, gaming and entertainment consoles, and other devices; Gaming, including Xbox hardware, and Xbox content and services; video games and third-party video game royalties; and Search, including Bing and Microsoft advertising. It sells its products through OEMs, distributors, and resellers; and directly through digital marketplaces, online stores, and retail stores. It has a strategic collaboration with DXC Technology and Dynatrace, Inc. The company was founded in 1975 and is headquartered in Redmond, Washington.

Fundamentals
Market cap$1.88T
P/E ratio37.26
Earnings per share$6.71
Return on equity42.70%
Profit margin33.47%
Total revenue$153.28B
Debt / Equity63.56
Price / Book14.48
52 week high$250.93
52 week low$162.30
Shares outstanding$7.56B
Previous close$247.86
Dividend Analysis
Dividend yield0.90%
Payout ratio31.15%
Trailing Annual Dividend Rate$2.14
Five Year Avg Dividend Yield1.66%
Ex-Dividend dateMay 18, 2021 7:00 PM

Industry: Internet Content & Information

Sector: Communication Services

Website: http://www.tencent.com

Description: Tencent Holdings Limited, an investment holding company, provides value-added services (VAS) and Internet advertising services in Mainland China, the United States, Europe, and internationally. The company operates through VAS, FinTech and Business Services, Online Advertising, and Others segments. It offers online games and social network services; FinTech and cloud services; and online advertising services, such as media, social, and others advertisement services. The company is also involved in production, investment, and distribution of films and television programs for third parties, as well as copyrights licensing, merchandise sales, and other activities. In addition, it develops software; develops and operates online games; and provides information technology, information system integration, asset management, online literature, and online music entertainment services. The company was founded in 1998 and is headquartered in Shenzhen, the People’s Republic of China.

Fundamentals
Market cap$775.87B
P/E ratio31.12
Earnings per share$2.52
Return on equity25.28%
Profit margin33.16%
Total revenue$73.37B
Debt / Equity33.73
Price / Book6.94
52 week high$99.40
52 week low$49.00
Shares outstanding$9.58B
Previous close$84.65
Dividend Analysis
Dividend yield0.26%
Payout ratio6.70%
Trailing Annual Dividend Rate$0.21
Five Year Avg Dividend Yield0.23%
Ex-Dividend dateMay 20, 2021 7:00 PM

Industry: Internet Content & Information

Sector: Communication Services

Website: http://www.iac.com

Description: IAC/InterActiveCorp operates as a media and internet company worldwide. The company offers digital marketplace service which connects consumers with service professionals for repairing, remodeling, cleaning, and landscaping solutions under the HomeAdvisor, Angie’s List, and Handy brands; Vimeo, a cloud-based software platform for professionals, teams, and organizations to create, collaborate, and communicate with video; and Dotdash, a portfolio of digital publishing brands that provides information and inspiration in select vertical content categories, as well as provides original and engaging digital content in a various formats, including articles, illustrations, videos, and images. It also provides general search services; advertising-driven desktop applications; and desktop browser applications. The company operates various platforms, such as iTranslate that develops and distributes downloaded mobile translation applications for users to read, write, speak, and learn foreign languages anywhere in the world; TelTech that develops and distributes mobile communications applications to help protect consumer privacy; Daily Burn, a health and fitness business, which provides streaming fitness and workout videos across various platforms; Care.com, an online destination for families to connect with caregivers for their children, aging parents, pets, and homes; Bluecrew, a staffing platform for flexible W-2 work; The Daily Beast, a website dedicated to news, commentary, culture, and entertainment that publishes original reporting and opinion from its journalists and contributors; NurseFly, a platform to connect healthcare professionals with job opportunities; and IAC Films providers production and producer services for feature films, primarily for initial sale and distribution through theatrical releases and video-on-demand services. The company was formerly known as IAC HOLDINGS, INC. IAC/InterActiveCorp is headquartered in New York, New York.

Fundamentals
Market cap$20.60B
P/E ratio77.80
Earnings per share$2.97
Return on equity5.15%
Profit margin8.85%
Total revenue$3.05B
Debt / Equity12.82
Price / Book3.11
52 week high$266.00
52 week low$62.16
Shares outstanding$83.34M
Previous close$228.00
Dividend Analysis
Dividend yield0.00%
Payout ratio0.00%
Trailing Annual Dividend Rate$
Five Year Avg Dividend Yield0.00%
Ex-Dividend date0

Industry: SoftwareApplication

Sector: Technology

Website: http://www.sproutsocial.com

Description: Sprout Social, Inc. designs, develops, and operates a web-based social media management tool in Americas, EMEA, and the Asia Pacific. The company offers cloud software that brings together social messaging, data, and workflows in a unified system of record, intelligence, and action. It provides various integrated tools in a range of functions comprising social engagement/response, publishing, reporting and analytics, social listening and business intelligence, reputation management, employee advocacy, and automation and workflows. The company’s tools serves a range of use-cases within its customers’ organizations, including social and community management, public relations, marketing, customer service, sales and customer acquisition, recruiting and hiring, product development, and business strategy. It also offers professional services, which primarily consist of consulting and training services. The company serves approximately 26,000 customers across small-and-medium-sized businesses, mid-market companies, enterprises, and marketing agencies, as well as government, non-profit, and educational institutions. Sprout Social, Inc. was incorporated in 2010 and is headquartered in Chicago, Illinois.

Fundamentals
Market cap$3.08B
P/E ratio
Earnings per share$ -1.48
Return on equity-22.59%
Profit margin-23.81%
Total revenue$132.95M
Debt / Equity16.96
Price / Book
52 week high$82.47
52 week low$11.90
Shares outstanding$44.12M
Previous close$58.53
Dividend Analysis
Dividend yield0.00%
Payout ratio0.00%
Trailing Annual Dividend Rate$
Five Year Avg Dividend Yield0.00%
Ex-Dividend date0

Industry: Internet Content & Information

Sector: Communication Services

Website: http://www.abc.xyz

Description: Alphabet Inc. provides online advertising services in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It offers performance and brand advertising services. The company operates through Google and Other Bets segments. The Google segment offers products, such as Ads, Android, Chrome, Google Cloud, Google Maps, Google Play, Hardware, Search, and YouTube, as well as technical infrastructure. It also offers digital content, cloud services, hardware devices, and other miscellaneous products and services. The Other Bets segment includes businesses, including Access, Calico, CapitalG, GV, Verily, Waymo, and X, as well as Internet and television services. The company has an agreement with Sabre Corporation to develop an artificial intelligence-driven technology platform for travel. Alphabet Inc. was founded in 1998 and is headquartered in Mountain View, California.

Fundamentals
Market cap$1.51T
P/E ratio38.38
Earnings per share$58.61
Return on equity19.00%
Profit margin22.06%
Total revenue$182.53B
Debt / Equity12.52
Price / Book6.83
52 week high$2,255.00
52 week low$1,187.60
Shares outstanding$329.87M
Previous close$2,224.75
Dividend Analysis
Dividend yield0.00%
Payout ratio0.00%
Trailing Annual Dividend Rate$
Five Year Avg Dividend Yield0.00%
Ex-Dividend date0

Industry: Internet Content & Information

Sector: Communication Services

Website: http://www.immomo.com

Description: Momo Inc. operates a mobile-based social and entertainment platform in the People’s Republic of China. It operates Momo platform that includes its Momo mobile application, as well as various related properties, features, functionalities, tools, and services to users, customers, and platform partners. The company’s Momo mobile application connects people and facilitates interactions based on location and interests; and various recreational activities, including live talent shows, short videos, and social games, as well as other video- and audio-based interactive experiences, such as live chats and mobile karaoke experience. It also operates Tantan, a social and dating app for young mobile Internet users, which enables users to find and establish romantic connections, and meet interesting people. The company was formerly known as Momo Technology Company Limited and changed its name to Momo Inc. in July 2014. Momo Inc. was founded in 2011 and is headquartered in Beijing, the People’s Republic of China.

Fundamentals
Market cap$3.24B
P/E ratio10.56
Earnings per share$1.47
Return on equity14.71%
Profit margin14.00%
Total revenue$2.29B
Debt / Equity33.22
Price / Book1.42
52 week high$24.69
52 week low$12.52
Shares outstanding$205.99M
Previous close$15.61
Dividend Analysis
Dividend yield0.00%
Payout ratio0.00%
Trailing Annual Dividend Rate$
Five Year Avg Dividend Yield0.00%
Ex-Dividend date0

Industry: Internet Content & Information

Sector: Communication Services

Website: http://www.iqiyi.com

Description: iQIYI, Inc., together with its subsidiaries, provides online entertainment services under the iQIYI brand in the People’s Republic of China. The company offers various products and services comprising internet video, online games, live broadcasting, online literature, animations, e-commerce, and social media platform. It operates a platform that provides a collection of internet video content, including professionally-produced content licensed from professional content providers and self-produced content. The company also provides membership, content distribution, and online advertising services. In addition, it operates iQIYI Mall, an e-commerce platform that focuses on entertainment-related merchandise, such as VR glasses, as well as sells electronics, apparel and accessories, and beauty and skincare products; iQIYI Show, a live broadcasting service that enables users to follow their favorite hosts, celebrities, and shows in real time through live broadcasting; and iQIYI Paopao, a social platform. Further, it is involved in the talent agency and IP licensing activities, as well as in developing Suike, a video community app. The company was formerly known as Qiyi.com, Inc. and changed its name to iQIYI, Inc. in November 2017. iQIYI, Inc. was incorporated in 2009 and is headquartered in Beijing, China. iQIYI, Inc. is a subsidiary of Baidu Holdings Limited.

Fundamentals
Market cap$13.89B
P/E ratio
Earnings per share$ -1.45
Return on equity-73.15%
Profit margin-23.69%
Total revenue$4.52B
Debt / Equity235.61
Price / Book9.79
52 week high$28.97
52 week low$14.60
Shares outstanding$789.28M
Previous close$18.68
Dividend Analysis
Dividend yield0.00%
Payout ratio0.00%
Trailing Annual Dividend Rate$
Five Year Avg Dividend Yield0.00%
Ex-Dividend date0

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