Since Facebook first went public in 2012, the stock has rallied more than 300% to reign supreme as the hottest stock in the social-media landscape. At the same time, Twitter has shed a third of its value since its initial trading day while Snap, the youngest of the trio, has had an even rougher showing.
But there’s clearly a change afoot in 2018, as you can see by this chart.
So far this year, Facebook FB, -0.31% shares, sideswiped by privacy missteps and disinformation campaigns, are firmly in the red, while Twitter TWTR, +1.78% has jumped by more than 21%. For Snap SNAP, +1.17% well, it’s still rough out there.
Now there’s trouble brewing at Instagram, which has been hailed on Wall Street as a critical growth engine for Facebook and a much-needed bridge to a younger generation that’s increasingly shunning their parents’ platform of choice.
Kevin Systrom, Insta co-founder and chief executive, announced that he and fellow co-founder Mike Krieger are leaving after eight years.
As proof of how important Insta has become for Facebook, look at Wall Street’s reaction: Facebook’s stock traded lower while the Dow Jones Industrial Average DJIA, -0.25% S&P 500 SPX, -0.13% and Nasdaq Composite COMP, +0.19% all managed to log early gains.
“We look for additional color in coming days and weeks,” JPMorgan JPM, -0.28% analyst Doug Anmuth told clients. “In the near-term, we expect [Facebook] shares to come under meaningful pressure from the departures.”
Anmuth projects Instagram will more than double its revenue from a year ago to $7.5 billion in 2018, which would represent about 14% of Facebook’s ad revenue.
If the preferences of MarketWatch readers are any indication, Facebook has some work to do. Yes, it’s a Twitter poll, so there may be some self-selection bias at work here, but check out how heavily this poll is leaning in one direction:
Battle of the social media platforms … which one are you long?
— MarketWatch (@MarketWatch) September 25, 2018