Social Media Struggles This Week

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During the week of Monday, April 27th through Friday, May 1st a number of social media companies reported their quarterly figures and had their quarterly figures impact their stocks. Let’s examine some of the social media stocks that had a week of struggles.

$TWTR
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Twitter had a fairly difficult weak reporting misses in their expectations for the quarter. Some experts on Wall Street expected the stock to rebound on Wednesday, Thursday and Friday after Tuesday’s meltdown, but this didn’t occur. Twitter’s current struggles are largely tied to their CEO Dick Costolo and his failure to execute on his plan for Twitter’s success.

$LNKD
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LinkedIn found themselves in a similar position to Twitter this week as their reported quarterly figures fell short of expectations and as a result they had to temper expectations for the entire year. LinkedIn, however, finds itself in a better situation, as they have a strong business plan and have an idea of where they’re going. LinkedIn has also established itself as a professional resume tool that unlocks more opportunity when you participate in the paid version, as a result they may have an easier chance to meet financial expectations.

$FB
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Facebook struggled this week as well, but very few have really noticed it. Facebook had been on a role for quite some time pushing over $80 a share. Facebook is starting to put themselves in the same breath as Google, where you can expect them to make purchases that are sound investments and will help them grow as a company. While the management may cause issues elsewhere Facebook’s management team is driving it towards future success.

$YELP
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The primary issue with Yelp is that the common internet user could care less about what Yelp is doing. The common individual isn’t going to run to a website to submit a review of a restaurant or deli in their area. Most individuals are going to indicate how they feel about a place by their actions. Most individuals will either continue to go somewhere if they like it or not return if they didn’t like it. If your business model doesn’t appeal to the majority you’re going to struggle in the long term.

$GOOG
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Google stock owners shouldn’t be worried in any way shape or form. Google owns too many hot commodities and has too many innovative minds for the company to all of a sudden not be successful. Google is in the same situation as Facebook where management knows what they’re doing and long term success matters more than 3 months of success.

While there are other social media stocks out there, these are the big five that reported earnings this week leading to their struggles, so we reference them here.

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