Morale lower at Meta following layoffs, Pinterest puts emphasis on teen privacy and other notable stories from this week
Welcome to “#SocialStocks,” The Fly’s weekly recap of Wall Street’s reactions to social media stock news.
BIRD BREAKING EVEN:
In a BBC interview, that took place at Twitter’s (TWTR) HQ in San Francisco, Elon Musk discussed lay-offs, misinformation and his work habits. As far as Twitter’s finances Musk said the company is now “roughly breaking even”, amid a return of the majority of advertisers, wrote the BBC’s James Clayton. According to the BBC, the Tesla (TSLA) founder said that “cutting the workforce from just under 8,000 at the time he bought the firm to about 1,500 had not been easy. Musk admitted to some glitches at Twitter, amid the departure of engineering talent but outages have not been for very long and the site was currently working fine, added the BBC.
TEEN PRIVACY:
In a Tuesday blog post, Pinterest (PINS) said, “Personal space matters, especially when you’re young. For teens, maintaining their personal space means having a safe place to grow, develop and figure out who they are. Teens have told us that they come to Pinterest to plan and manifest their futures without the fear of being judged. We believe it is important to protect this experience on the platform. That includes safety, of course, because it’s impossible to feel inspired if you don’t feel safe. As we continue to focus on protecting teens’ personal space, safety and emotional wellbeing, we want to share what you can expect from us now and in the near future. Teen accounts under the age of 16 on Pinterest are private. We believe strangers should not be able to see teens’ profiles and invade their personal space, which means their Pinterest accounts won’t be discoverable by others. Currently, boards and Pins for teens under 16 are not visible or accessible to anyone but the user. We know this isn’t ideal for younger people who use Pinterest to collaborate with their friends and family, but we don’t want anyone contacting them without their permission. Coming soon, we will re-introduce the ability for teens to share inspiration with the people they know as long as they give them permission. Also coming soon, we’ll offer more options for parents and guardians who want to support teens under 18 online. For example, parents will have the ability to require a passcode for their teen to change certain account settings. Additional information on how to change permissions can be found on our Teen Safety Hub and Help Center.”
META MORALE:
Meta Platform’s CEO Mark Zuckerberg declared 2023 will be the “year of efficiency” at his company, which, so far, means mass layoffs, Sheera Frenkel and Mike Isaac of The New York Times reported. Zuckerberg has conducted two rounds of cuts over the past six months, eliminating 30% of the company’s work force. At the same time, some of the company’s top executives have moved away and are now managing large parts of the company in places like London and Tel Aviv. The layoffs combined and the absentee leadership combined with concerns Zuckerberg is making a bad bet on the future have devastated employee morale at Meta, nine current and former employees told the Times.
4/20:
Elon Musk tweeted: “Final date for removing legacy Blue checks is 4/20”
WHATSAPP MARKETPLACE:
Mark Zuckerberg announced that people across Brazil can pay local small businesses right within a WhatsApp chat, Meta Platforms, the parent of WhatsApp, reported in a post to its newsroom. “This seamless and secure checkout experience will be a game-changer for people and small businesses looking to buy and sell on WhatsApp without having to go to a website, open another app or pay in person. We’re rolling the feature out today to a small number of businesses, and it will be available to many more in the coming months,” according to Meta. Shares of PagSeguro Digital (PAGS) and StoneCo (STNE), also offer payments services in Brazil.
IMPACT:
Sprout Social (SPT) announced the release of a Total Economic Impact study conducted by Forrester Consulting that reveals how Sprout Social enabled customers to achieve a return on investment of 233% and a net present value of $1.3 million over three years with a payback period of less than six months. The commissioned study conducted by Forrester Consulting on behalf of Sprout Social found that by eliminating manual work and providing quicker access to key business and consumer insights, Sprout Social enabled customers to boost productivity and focus on building impactful social strategies. The study also found that Sprout Social’s customers significantly reduced costs by consolidating their tech stacks and lowering their reliance on paid advertising through organic and employee-driven social campaigns.
SPROUT GPT:
Sprout Social announced the launch of a series of new AI features across its platform that combines the power of Sprout’s proprietary machine learning and deep automation capabilities with OpenAI’s GPT model. The new features will be available throughout the Sprout platform, starting with additions to listening, publishing, customer care and advocacy. They build on Sprout’s strengths in user-centric design and its extensive, diverse customer base to create intuitive solutions that enable organizations to work smarter, unlock creativity and exponentially increase social media’s business impact. The first feature, Smart Query Suggestions, is currently in beta and will be widely available soon. It elevates Sprout’s Listening solution with GPT-powered query keyword recommendations to capture the most comprehensive insights. Additional upcoming OpenAI and Repustate-based capabilities will minimize manual care tasks, provide targeted, high-quality copy suggestions to prioritize high-impact creative and strategic work, and unlock nuanced understanding of social conversation.
SOME INCENTIVE:
Despite a push to rein in costs, Meta is giving some VR developers compensation packages of $600K to $1M, significantly more than most gaming companies, The Washington Post’s Naomi Nix reported.
PINNING:
It’s time to put a pin next to Pinterest stock, Jacob Sonenshine wrote in this week’s edition of Barron’s. It has been a tough couple of years for the social-media site, with shares looking two-thirds of their value since hitting a record high of around $89 in February 2021. Better times lie ahead for Pinterest stock, the author argued. While user growth has moderated, the $19 billion company has been taking steps to increase the money it makes off each user by making it easier and more efficient for advertisers to reach them. It has also been improving operations in its international business, which should drive additional revenue gains, even as analysts reduce their expectations.
GAMES WITH FRIENDS:
Meta’s Facebook Gaming announced that users can now play games during video calls on Messenger. “This new, shared experience in Messenger makes it easy to play games with friends and family while in a video call, allowing you to deepen connections with friends and family by engaging in conversations and gameplay at the same time,” the company said. “Today, there are 14 free-to-play games available in Messenger video calls on iOS, Android, and web, with no installs required. Games include a mix of brand new titles, like Card Wars by Bombay Play and Exploding Kittens by Coatsink as well as some fan favorites like Mini Golf FRVR by FRVR and Words With Friends by Zynga. Each game supports a different number of players, but most games can be played with just two people.”
ANALYST COMMENTARY:
OTR Global upgraded Meta Platforms to Positive from Mixed.
UBS raised the firm’s price target on Meta and reiterated a Buy rating on the shares. The analyst’s top idea for 2023 in online advertising remains Meta. The firm sees room for positive estimate revisions in Q1 and increased its estimates to reflect lower costs. Consensus estimates for Meta still look too low, the analyst tells investors in a research note.
Raymond James initiated coverage of Pinterest with an Outperform rating. The analyst said Pinterest’s “unique” visual discovery platform and high intent user base provides an attractive platform for advertisers. The firm expects steady user growth going forward and increasing engagement metrics driven by the company’s international expansion and increasing personalization. It sees double-digit long-term revenue growth believes Pinterest’s longer term EBITDA margins can return to 30%-plus.
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Originally Posted April 12, 2023 – #SocialStocks: Musk says Twitter ‘breaking even’ after most advertisers returned
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