Should you blindly “buy the dip” on Facebook, Twitter? (hint: no)
They aren’t going anywhere… seems to be the consensus among young investors as they jump on to ‘Robinhood’ and buy up Facebook and Twitter stock. Both companies fell 20% after posting earnings results last week. I know – two articles on Facebook, but it really is that important to talk about today.
Putting on the brakes… is what both companies are preparing to do. Facebook is investing in “privacy first,” and Twitter is cleaning up and focusing on the health of the platform. Such ambitions will undoubtedly put a damper on advertising dollars which is how both companies make their money.
Even more problems… and both companies are stalling when it comes to user growth. Everyone has heard of Facebook and Twitter, and the platforms have 2.23B and 335M users, respectively. However, people that don’t use these platforms seem unlikely to be won over at this point. Just look at Myspace, the old social media platform that now serves as an archive of your cringe-worthy pre-teen years. Will Facebook and Twitter see a similar fate?