The stock market keeps investors on their toes on a daily basis. Add to that the global pandemic and things move up a gear. Whilst some industries have been hit, others have flourished. It’s the task of traders to identify the best places to invest their money.
Everyone knows that the internet has brought a colossal revolution. Smartphones and social media have followed in its wake. The rise and popularity of such technology have unsurprisingly gained the interest of stock market traders. But is this justified? Let’s take a look.
Social Media is Successful But Volatile
Over two and a half billion people used social media in 2018. This figure is expected to exceed three billion by 2021. In 2019 the global advertising revenue for social media added up to more than $32 billion, and this year it could increase by $6 billion more.
Wall Street has many stories of top companies who have a sudden reversal of fortune. Any wise investor will be consistently researching the market for what to invest in, and when. According to the guys at www.thestockdork.com people want to read reviews of the stock market and to receive details of the best day trading stocks. They also want to know the best books to read on the subject, and even where to find stocks under $5.
This is a highly popular platform for writing posts and publishing photos and video content. It is more of a family of apps to be honest, as it also includes WhatsApp, Messenger, and Instagram.
At one stage shares were selling at $220 each, which is expensive for social media. One set of the year on year statistics said the revenue had increased by nearly a third. Another report said users had increased by over ten percent year on year.
Stocks can be volatile when companies are volatile. There was a lot of negative publicity about fake Covid information and equipment being featured on Facebook. The company was forced to clean up its act and even created a Covid information center.
Unsurprisingly, the economic downturn has reduced the amount of advertising on Facebook. As it gains almost all of its income through this, investors need to keep a close eye.
This is a platform allowing people to publish mini-blogs of up to a maximum of 280 characters. Imagine 145 million people standing in a crowd - that’s how many people are using Twitter on a daily basis. This number is still growing.
At one stage the stock price was $34 (much cheaper than Facebook). Each year revenue has been growing at around eight percent. In March 2020 the pandemic took its toll, and ad revenue was down by nearly one third.
This is a video conferencing app a little like Skype. In December 2019 there were around ten million users, but by the start of April 2020, this had grown twenty times larger. Four weeks later there were three hundred million!
Investors may see a surefire value in buying shares here. Whist Zoom is going okay and will continue to do so, it did experience a blip. Some major security issues were discovered, so three months of potential product development were turned into data protection work.
Pinterest and Tiktok
Pinterest is a popular picture-sharing app. Its stock values have declined, however. At one stage this was by ten cents per share. Expenses have been up and down, and this volatility has limited Pinterest’s ability to consistently make money. This will have to be dealt with in order to secure its ongoing survival.
TikTok has been growing in users at an exponential rate. It’s a Chinese app originally used for lip-syncing, but which now features short video clips. Businesses were looking to advertise on this platform due to its huge audience, but there has been major turbulence too. America had been debating whether to ban or remove it from the app stores due to concerns over potential data breaches. The other option was to buy it.
Snap, Tencent and Weibo
Snap includes the better known Snapchat which features quickly disappearing posts. 210 million people use this each day and it has recently been improved for Android users. Whilst shares at one stage tripled in value from $5.74 to $19, the company has battled to make profits. Analysts say Snap should be well-positioned to have a stable future, however, as growth is steadily increasing.
Tencent features WeChat, which is the top social media platform in China. This has 1.15 billion users! Tencent actually has several arms. Their music and video businesses are flourishing. When it comes to video game publishers, they are the biggest globally. Because of the spread of investment, they are a stable company and their shares are doing well. They are in a good position to face the future.
Weibo is another Chinese application, having 486 million users every month. Whilst there has been a high market share in advertising, stocks have declined. This makes it an insecure route for investors.
Social Media Advertising
Sadly, there has been a lot of advertising which has lured inexperienced people into the world of stocks and shares. Driven by financial desperation, some people have believed offers of fun and quick financial gains through using trading apps. Some brokerages have underplayed the risk element, and not warned that losses can be big and quick with market trading.
Whilst stock trading is a valid past time or full-time job for the experienced, it can be dangerous for the ill-advised. Some apps are designed for ease of use, but they can easily become a place for unwise people to gamble away their money and become addicted to the process. Newcomers need to research well and practice on simulated apps first. Conservative trading is more appropriate at the beginning.
Another advertising misunderstanding occurred when people jumped to buy shares in Zoom. Many folks bought shares in Zoom Technologies instead of Zoom Video Communications.
As we have seen, stock markets can widely vary. The popularity of social media seems set to continue, whilst some platforms struggle to make profits. Interested investors can watch their progress daily in order to make the right decisions. Social media companies need to provide clear advertising in response.