The stock of Meta Platforms Inc (Nasdaq: META) attracted the market’s attention after its latest product, Threads, perceived as a rival to Twitter, recorded an exponential rise in signups, aided by the huge customer base of Instagram. The text-driven interactive platform, at the time of preparing this article, had crossed 100 million signups, as per the revelation of Meta CEO Mark Zuckerberg. The stock closed at $298.29, up $4.19 or 1.42% from the prior close.
Meta, based in Menlo Park, California, has yet to give any update on interaction metrics for the social media platform. However, media reports indicate that over 95 million posts with 190 million likes have been made.
The skyrocketing growth is aided by the fact that Threads is linked to the company’s popular photo and video-sharing social network, Instagram. Users can sign up with Threads using their Instagram handles. Furthermore, they would be able to retain a portion of their followers when they register with the app.
According to Jasmine Enberg, a main researcher at Insider Intelligence, Meta would only require a monthly usage of Threads from one out of four members of Instagram to achieve a level of popularity comparable to Twitter. In its recent quarterly earnings report, Twitter disclosed that it had approximately 238 million daily active users (DAUs) who could be monetized.
With the European rollout yet to happen, analysts believe that the app has significant growth potential. Notably, Instagram’s head clarified that the European debut is pending to sort out regulatory issues.
In the meantime, Elon Musk, CEO of Tesla, who bought Twitter last year, has conveyed his apprehensions about Meta’s platform. Specifically, Musk’s attorney, Alex Spiro, has written a letter to Meta, alleging “unlawful misappropriation” of commercial classified information.
Andy Stone, communications director of Meta, responded to the allegation on Threads by clarifying that none of the individuals on the Threads engineering team have previously worked for Twitter.
Also, short-term growth is not sufficient to make Threads a credible substitute for Twitter, which has successfully withstood several downturns in the past. The application has to successfully make users come back frequently.
Twitter is widely recognized as the primary platform of choice for politicians, scholars, and media professionals. Frequently, the platform is where news tends to be first published. On the contrary, Meta’s Threads possesses the potential to attract a more diverse audience and cater to a wider range of interests. This is mainly because of its integration with Instagram, a visually-oriented platform that offers distinct usage scenarios. Additionally, Meta has implemented measures to minimize the presence of political topics on Facebook. If this strategy is applied to Threads, it would distinguish them from Twitter.
Enberg pointed out that individuals who consistently stay abreast of news and regularly engage on Twitter are not likely to discontinue their usage of the service. She further stressed that Meta must prioritize the task of maintaining engagement for Threads to keep up its rapid growth beyond the first few days of newness.
Moreover, there remains uncertainty regarding the extent to which individuals will leverage Threads to stay updated on news and worldwide happenings, given the potential disparities in cultural norms on the Threads platform compared to Twitter. Nonetheless, this specific feature could potentially benefit Meta, as even frequent Twitter users are growing increasingly frustrated with the ongoing disorder and spontaneous modifications. Therefore, Threads might serve as much-needed relief for them.
Interestingly, over 25% of the total 535 members of Congress, spanning both chambers, have established accounts. Additionally, six Republican presidential candidates and high-ranking White House staff have also done so.
Firms and individuals who have been regular advertisers on Meta would probably start using Threads to advertise their offerings if they felt that the platform would not tarnish their brand image. Meta has stated that the community guidelines used to govern Instagram also apply to Threads.
The upbeat response to Threads is expected to keep the stock of Meta slightly bullish in the short term.
The historical price chart indicates that the stock of Meta is rising after consolidating at 280 levels. The next resistance is anticipated to be near 330. Additionally, the stock is trading above its 50-day moving average while the MACD indicator is showing a positive reading. Therefore, we anticipate the stock of Meta to remain in an uptrend in the near term.
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