Last year was certainly a banner year for social media stocks. Facebook Inc (NASDAQ:FB) finally had its breakthrough point on Wall Street, and LinkedIn Corp (NYSE:LNKD) was hot too. Then Twitter Inc (NYSE:TWTR) came onto the scene, and investors were loving it since its initial public offering up until its first earnings report.
Now the results from each social media company’s December quarter are in, and we’re seeing a couple of interesting trends. But it’s anyone’s guess whether these trends will hold.
Comparing Facebook, Twitter, LinkedIn results
Facebook Inc (NASDAQ:FB) released its quarterly results on Jan. 29, while LinkedIn Corp (NYSE:LNKD) reported last night and Twitter Inc (NYSE:TWTR) reported earlier this week. Investors were thoroughly happy with Facebook’s results, but they were far less thrilled with LinkedIn and Twitter—even though both delivered solid numbers. Interestingly enough, investors were more worried about certain metrics within the results of all three social networks than they were with the fundamental December numbers.
The big problem with LinkedIn Corp (NYSE:LNKD)’s report was the company’s guidance, which was weaker than expected. The social network beat on revenue and was in line with earnings per share estimates. Twitter Inc (NYSE:TWTR)’s problem was user growth, which fell short of investor expectations. The micro-blogging site actually doubled consensus estimates for earnings per share though, posting earnings of 2 cents instead of losses of 2 cents per share.
Investors were particularly impressed with Facebook Inc (NASDAQ:FB)’s advertising revenue, which was very strong in the fourth quarter. The social network’s overall revenue rose 63% year over year during the quarter, and it reported non-GAAP earnings of 31 cents per share—which was ahead of Wall Street’s projected 27 cents per share. Also Facebook reported a 22% year over year growth in daily active users, showing that concerns about user engagement seem overblown for now.
Comparing stock movement for Facebook, Twitter, LinkedIn
Taking a look at stock chart movement since each company’s earnings report and even in the days before shows some interesting trends. Today, shares of Twitter Inc (NYSE:TWTR) rose as much as 6%, although it still wasn’t enough to recover from the nosedive they took Thursday after the company’s earnings report. Shares of Facebook Inc (NASDAQ:FB) also rose, increasing more than 3%. Meanwhile, shares of LinkedIn Corp (NYSE:LNKD) declined more than 6% as disappointment in last night’s report continued.
Now let’s rewind a bit to see what these companies’ stocks have been doing over a longer term.
As you can see from the Google Finance chart, shares of all three companies declined on Jan. 27 and then increased on the following day. Then on Jan. 29 ahead of Facebook Inc (NASDAQ:FB)’s report, all three of them increased in anticipation of positive results. On the 30th, Facebook shares rose the most, but all three social media stocks received some benefit from the company’s positive report, possibly as investors considered that the social media industry as a whole is probably pretty strong. Of course this isn’t much of a surprise since it isn’t uncommon for stock of competing companies to be affected by news about one of the others.
Then on Feb. 5, we had Twitter Inc (NYSE:TWTR)’s report after closing bell, and you can see where shares took a dive on Thursday. LinkedIn Corp (NYSE:LNKD) rose, however, ahead of its earnings report after closing bell on Thursday. Today LinkedIn is seeing fallout from last night’s report, while Facebook Inc (NASDAQ:FB) and Twitter seem to be reaping some benefits from LinkedIn’s decline.