Why Social Media Stocks Are Shining Like Never Before!

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Social media has become a huge part of our day-to-day living. Whether you’re browsing Instagram to see cat photos when you’re bored, scrolling through Facebook to catch up on the latest news, or scanning the markets to begin stock trading with app platforms as CFDs, it’s no doubt that apps have infiltrated society in a big way.

Since the beginning of the pandemic, the prevalence of social media in our lives has become massive, and people are now looking to social channels for information, or to connect with each other during periods of lockdown and isolation, or simply to be entertained. Over the last year, social media companies have boomed, with Tik Tok, Instagram and Snapchat amongst the frontrunners leading the charge.

Let’s take a look at how each of these social media giants is doing in 2021 and if their pandemic-induced uptick may continue.

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TikTok 

You have probably heard of Tik Tok by now, and even if you don’t have it, you’ve probably seen snippets of the videos from this app that has taken the world by storm. Tik Tok is one of the fastest growing social media apps in the world, and after being taken over by parent company ByteDance in 2018, the app has soared to new heights.

As it stands, Tik Tok has racked up over 500 million active users, and has been downloaded over 80 million times in the US alone. While ByteDance is not yet available to trade in the stock markets, it is one of the most eagerly anticipated IPOs in the tech realm, with rumours of a public listing in the cards in the future. Ahead of this, ByteDance has decided to branch into the e-commerce space by enabling users to sell items via their short videos. As the world’s most valuable private company, the new endeavour is already making the company millions, and ByteDance aims to make $185 billion by the year 2022.

If all goes according to plan, it would mean that ByteDance could go public at a value of over $250 billion. Watch this space to see what Tik Tok does next to keep its users hooked and thoroughly entertained.

Instagram 

Last year, Instagram launched a variety of features to help independent creators generate funds during uncertain times. These included Instagram Shop and Shopping in Reels, which allowed creators to sell their goods and services right in the app.

In May 2021, the social media giant released a professional dashboard for creators to get helpful insights into the reach of their content. Instagram continues to innovate and stay with the times by appealing to their audience with new features in 2021, such as the recent announcement of a Marketplace, which will take Instagram further into the e-commerce space to connect content creators with their audience with the intent of making money.

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With the world’s large shift towards e-commerce, this is a smart move from Instagram, which aims to connect emerging creators with brands in a more organic way.

Adam Mosseri, head of Instagram, said on an Instagram Live broadcast, “We should be able to help brands find creators that are uniquely aligned with the work they’re trying to do and vice versa.”

Instagram is owned by Facebook, and therefore falls under the Facebook umbrella when it comes to company performance. This year, Facebook has had an outstanding first quarter, blowing expectations out of the water, with 3.45 billion monthly users across all of its apps, a 48% increase in revenue year-on-year, and a 94% growth of net income from $4.9 billion to $9.5 billion year-on-year. If you’ve got your eye on stock trading with app-based platforms as CFDs, be sure to stay up to date on the latest from Facebook.

Snapchat

In Q4 of 2020, Snapchat’s userbase grew by 16 million daily active users, which took it to a total of 265 million, keeping the company on the up and up. Since then, Snapchat has continued on this upward streak, with its parent company Snap’s Q1 2021 results beating all expectations.

Refinitiv forecasted that Snap would generate $743.8 million of revenue in the first quarter, but the company blew past this to generate $770 million instead. FactSet predicted that Snap’s daily active users would total 274.62 million, but Snap comfortably hit 280 million. The company is anticipating an 80-85% increase in revenue in Q2 of 2021, according to Snap Chief Financial Officer Derek Andersen, which will beat its 66% growth rate in the first quarter.

Snapchat’s CEO Evan Spiegel has recently gone against the grain in the tech industry by acquiescing to pay Apple’s 30% commission, saying, “We really feel like Snapchat wouldn’t exist without the iPhone and without the amazing platform that Apple has created.” Spiegel went on to explain further by saying, “In that sense, I’m not sure we have a choice about paying the 30% fee, and of course, we’re happy to do it in exchange for all of the amazing technology that they provide to us in terms of the software but also in terms of their hardware advancements.”

Snapchat certainly marches to the beat of its own drum, but the numbers show that that seems to be working for them.

The bottom line

While social media giants like Tik Tok and Instagram seem to be having a booming time of it at present, it will be interesting to see how global audiences react once lockdown measures have been completely lifted. Will they keep to their social routines, or will they put their phones down more frequently, posing potential challenges for these companies who thrive on engagement? Only time will tell.

The ups and downs of the share prices of major social companies may present both opportunities and risks for those who engage in stock trade with app based platforms as CFDs, or Contracts For Difference. CFDs essentially allow you to take advantage of price changes in both directions—increases as well as decreases—of shares in tech companies like Facebook and Twitter, without having to purchase the underlying asset (in this case any actual shares). 

Before you begin CFD stock trading with app-based platforms, do your homework and find a broker you can trust. Be sure to check out their offering of CFD instruments, which may include shares, commodities, ETFs, global indices, and foreign currency pairs, and choose a broker that’s regulated to ensure security and reliability. 

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