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#SocialStocks: Snap boasts 3M Snapchat+ Users, New Features at Partner Summit

Posted April 20, 2023 at 11:30 am
Andrew Perez
The Fly

Meta to implement next round of job cuts, Musk to create ChatGPT rival 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.

SNAP SUMMIT: 

Snap (SNAP) said at its annual partner summit that the company has attracted more than 3M users to its Snapchat+ subscription service, according to Bloomberg. The “growth has exceeded the company’s expectations and includes the addition of about a million paying users in the past 11 weeks,” Snap said, according to Bloomberg. “We never expected that we could grow to 3 million subscribers,” Snap CEO Evan Spiegel is reported to have said in an interview.

Snap has announced “new programs that help creators build sustainable businesses and introduced new tools to grow and engage with their audience across Stories and Spotlight.” Regarding monetization programs, the company said that, “Now, creators who have at least 50,000 followers, 25 million monthly Snap views, and post at least 10 Stories a month may be eligible to join our Stories revenue share program… Our Spotlight reward program is one of the ways we continue to support our community of aspiring and emerging creators as they turn content creation into a career. We are increasing the total rewards available to reward creators for making the top Spotlight Snaps.” On Public Stories, Snap says that starting today, “Snapchatters aged 18 or older will be able to post their own Public Story with a simple tap. Open the camera, create a Snap, and choose to share it with friends or add it to your Public Story, all from the same account… Our new scheduling feature gives creators more control and allows them to post to their Story whenever, wherever. Creators can also save a Snap to their new Public Profile and get access to content performance insights and Story Replies.” The company is also expanding creator content on Snapchat, “bringing creator content to new surfaces across Snapchat like Snap Map and are making it easier to discover creators across Stories and Spotlight. Creators helping our community discover the next “can’t miss” restaurant can expand their reach by simply tagging locations in their Spotlight Snaps. With place tags, their videos will appear on place profiles on the Snap Map, where more than 300 million Snapchatters go each month for great local recommendations.”

In conjunction with its annual partner summit, Snap said in a blog post: “Our community is full of music fans, and 85% of Snapchatters report using the app to enhance their experience of going to see live music… We’re building on our multi-year partnership with Live Nation to enhance live music with augmented reality and bringing custom AR experiences to 16 of the biggest festivals… Our AR Compass and 3D map of the grounds will be available at all of them, helping you make your way to the right stage at the right time and find your friends instead of getting lost in the crowd. With custom AR Lenses to express yourself and enhance Snaps, festival-goers can truly see music differently. Today, we also shared our new integration with Disguise, the industry’s leader in live event visualization and virtual production technology, that will bring Snap AR to some of the world’s largest venues and tours. During future shows, fans can see AR visuals through the Snapchat camera that interact with the on-stage visual production, via Disguise RenderStream, bringing the artist’s creative vision to life like never before. We’ll also be teaming up with one of the world’s most famous DJs, Kygo, to create AR experiences for some of his concerts this summer so fans can immerse themselves in his music, and we can’t wait to work with more artists later this year.”

Snap introduced a new augmented reality enterprise service called AR Mirrors. “Our AR Mirrors bring the power and creativity of AR to businesses in their own physical spaces and events, so that customers can virtually try on products, play with engaging and fun experiences that encourage them to create and share content, and receive helpful guides and explanations to learn more about the products they see in the store,” the company said. “Brands that create innovative experiences, such as virtual try-ons and using AR in-store, are 82% more likely to be recommended to others, making AR Mirrors a must-have addition to stores. Retail brands like Men’s Wearhouse and Nike have already used AR Mirrors to enhance the in-store experience, and we currently have our AR Mirror in a Men’s Wearhouse store to get shoppers ready for prom and wedding season.” Snap added that it is partnering up with Coca-Cola (KO) to transform a vending machine into an “entirely new kind of product experience.” “Our first prototype is an AR-enabled Coca-Cola vending machine, which offers a portal to incredible AR experiences, rewards, and more,” Snap said. “Shoppers can step up to the machine and use hand gestures to control what comes next. Snap and Coca-Cola share a long-term vision to build an AR ecosystem that evolves the way people engage with the Coke brand across their vending machines, app, and website, and we’re thrilled to bring this experience to life.”

Snap continued that “My AI is rolling out to Snapchatters globally, now with brand new features,” including “Personalize My AI,” “Bring My AI into Conversations with Friends,” “Snapchat Recommendations,” “Share Snaps with My AI,” and “Watch It Snap You Back.” The company added that, “My AI is far from perfect, but we’ve made a lot of progress. For example, 99.5% percent of My AI responses conform to our community guidelines, and since launch, we’ve worked to improve by: Programming My AI to adhere to our community guidelines to help protect against responses that could be inappropriate or harmful. Implementing a new age signal using a Snapchatter’s birthdate, so the chatbot will consistently take their age into consideration. Adding additional moderation technology, which will allow us to assess the severity of potentially harmful content and temporarily restrict Snapchatters’ access to My AI if they misuse the service. Preparing to incorporate My AI into our in-app parental tools, Family Center, which will allow caregivers to see if their teens are chatting with My AI and how often.”

Verizon (VZ) announced that Snapchat+, Snap’s premium subscription service, will be available on +play, “along with an exclusive offer for three months of access, on us.” The announcement was made today during Snap’s annual Partner Summit. Snapchat+ and the three-month offer will be available on +play starting next month, Verizon stated in a press release.

THE RECKONING: 

Meta (META) will conduct another mass round of layoffs on Wednesday, Vox’s Shirin Ghaffary reported. According to a source, the job cuts could be in the range of 4,000 jobs, out of the planned 10,000. In an internal memo posted to a Meta employee message board on Tuesday evening and viewed by Vox, the company told employees that the layoffs will start on Wednesday and will impact a wide range of technical teams including those working on Facebook, Instagram, Reality Labs, and WhatsApp. “This will be a difficult time as we say goodbye to friends and colleagues who have contributed so much to Meta,” Lori Goler, Meta’s head of people, said in the memo.

PUTTING ALL THE CHIPS ON THE TABLE:

Microsoft (MSFT) is readying its own AI chip amid surging costs of machine learning, The Information’s Anissa Gardizy and Wayne Ma noted. According to two people with knowledge of the project, Microsoft, which placed an early bet on ChatGPT creator OpenAI, has been developing the “Athena” code since as early as 2019 and they are already available to a small group of Microsoft and OpenAI employees, who are testing the technology. The report noted that Amazon (AMZN), Google (GOOGL) and Facebook also make in-house chips.

A COMPETITOR EMERGES: 

Elon Musk, the billionaire founder and CEO of Tesla (TSLA) and owner of Twitter (TWTR), is developing plans to launch a new artificial intelligence start-up to compete with ChatGPT-maker OpenAI, reported Financial Times’ Madhumita Murgia, Tim Bradshaw, Tabby Kinder and Richard Waters. Musk is assembling a team of artificial intelligence researchers and engineers and also has been in discussions with a number of investors in SpaceX and Tesla about putting money into his new venture, according to the report, citing sources. Microsoft (MSFT), Alphabet’s Google, Meta and Amazon are among the mega-cap tech companies that have been publicly discussing their own AI ambitions and/or integrating ChatGPT or other rival services into their offerings. Musk has secured thousands of high-powered GPU processors from Nvidia (NVDA) for the new project, according to people with knowledge of the matter, the report added

NEWFOUND ELGIBILITY: 

Snap is eligible to join the S&P 500 after S&P Dow Jones Indices decided to ditch a rule barring companies with multiple share classes from joining its indexes, MarketWatch’s Jeremy Owens reported. The move comes after the index manager consulted with “market participants” at the end of last year to discuss several potential changes to the policy, Owens wrote. The ban was put in place after Snapchat’s parent company sold IPO shares with no voting rights.

M&A: 

Zoom (ZM) announced the acquisition of Workvivo to “extend Zoom’s platform and offer its customers new ways to keep employees informed, engaged, and connected.” “We are excited to welcome the Workvivo team to Zoom. The power of Workvivo employee experience platform, with its robust communications and engagement offering combined with Zoom’s all-in-one collaboration platform, allows organizations to fully unlock the potential of their employees and evolve their company culture in a hybrid world. Workvivo has set the standard for employee communications, helping businesses reach and engage millions of employees worldwide. Workvivo prioritizes ease-of-use and simplicity of design, offering the best user experience which is a perfect match to Zoom’s DNA,” said Kelly Steckelberg, CFO at Zoom. Following the close of the transaction, Zoom plans to incorporate Workvivo’s capabilities into its platform “to deliver a best-in-class, employee experience.” Workvivo’s founders John Goulding and Joe Lennon, and the entire Workvivo team, “will be instrumental in driving employee experience innovation strategy,” the company said. The transaction is expected to close in Q1 FY2024. Terms of the transaction were not disclosed.

SUBSCRIPTION OFFERING: 

Musk said on Thursday, that users of the social media app may “Apply to offer your followers subscriptions of any material, from longform text to hours long video! that followers subscriptions to content, including long-form text and hours-long video.” Musk continued in the tweet; “For the next 12 months, Twitter will keep none of the money. You will receive whatever money we receive, so that’s 70% for subscriptions on iOS & Android (they charge 30%) and ~92% on web (could be better, depending on payment processor). After first year, iOS & Android fees drop to 15% and we will add a small amount on top of that, depending on volume. We will also help promote your work. Our goal is to maximize creator prosperity.”

VR DEVELOPERS NEEDED: 

TikTok parent ByteDance is offering to pay developers who made virtual reality software for Meta Platforms to bring their apps to its Pico headsets, offering to pay some VR developers $15,000 to $25,000 per title, Salvador Rodriguez, Meghan Bobrowsky, and Jeff Horwitz of The Wall Street Journal noted, citing people familiar with the matter. This underscores the growing competition between the two companies in the virtual reality space. ByteDance and Meta are both working to lure software makers who can build apps and experiences that will draw in new users to virtual reality.

BECOMING X CORP: 

Twitter has told courts that while the social-media platform still bears the name Twitter, “Twitter has been merged into X Corp.,” Alexa Corse of The Wall Street Journal reported, citing a legal filing last week to a Florida federal court in a case where Twitter was a party. X Corp. is also now an entity incorporated in Nevada instead of Delaware.

ANALYST COMMENTARY: 

New Street analyst Dan Salmon downgraded Meta Platforms. The analyst now sees better opportunities for upside elsewhere in the firm’s coverage after Meta’s outperformance relative to the group. The company’s “Year of Efficiency” re-rating is likely complete and while incremental cost cuts could help boost estimates, they are unlikely to impact the multiple materially, the analyst tells investors in a research note. Despite Meta’s incremental focus on costs, the firm thinks the company’s mid to long term margin outlook “lacks visibility.”

Wolfe Research raised the firm’s price target on Meta. Meta remains the analyst’s top pick into Q1 earnings. The results and Q2 guidance should reflect a relatively stable demand environment and progress on the company’s growth initiatives and cost savings, the analyst tells investors in a research note. The firm says Meta’s valuation is still compelling at current levels.

TD Cowen analyst John Blackledge raised the firm’s price target on Snap. The analyst said its advertising revenue continues to be challenged by macro headwinds and rising competition.

Citi opened a “90-day negative catalyst watch” on shares of Zoom Video. The analyst said negative data points are “piling up” which could further pressure the company’s growth rates. Citi’s recent chief investment office survey suggests an incremental de-prioritization of unified communications as a service spend and overall videoconferencing spending intentions “lacking growth,” the analyst tells investors in a research note. Beyond the survey data points, Zoom may face other challenges including rising competition, and web traffic data trends also suggest continued deterioration post January, contends Citi.

Originally Posted April 19, 2023 – #SocialStocks: Snap boasts 3M Snapchat+ users, new features at partner summit

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