US Wall Street-listed social media companies have earned more than $492.692 million in combined capitalization value so far in 2023.
Despite the uncertainty generated in the markets after the bankruptcy of Silicon Valley Bank, the shares of these companies continued their upward trend to double-digit numbers.
Meta Platforms, parent company of Facebook, is the main winner so far this year with a 79.57% increase in its share price. In market value it has earned more than 241,182 million dollars.
The second site is from Alphabet, owner of the You Tube social network, with an increase of 22.73% in the value of its titles. In market value, this company has earned 246.396 million dollars to add more than 1.39 trillion dollars.
Shares of Snap, parent of the social network Snapchat, have gained almost 18%, while shares of Pinterest have risen 16.35%.
“Meta has fired many people, anticipating that the rate hike would increase its costs and that the inflationary trend would not stop in the short term,” said Cipactli Jiménez, an independent investor.
The expert added that companies in the technology sector, which includes social networking firms, have very high salary levels that strongly impact their cost structure.
Meta alone has announced nearly 21,000 layoffs since November of last year, reducing its workforce to 66,000 employees.
For its part, Alphabet, also the parent company of Google, cut nearly 12,000 jobs in January of this year, which affected a large part of its workforce that was cooperating in experimental projects.
Snap terminated 20% of its staff in September of last year, that’s about 1,300 workers.
Pinterest was more moderate with its downsizing, laying off only 150 employees, equivalent to 5% of the total.
stagnant
Even with this year’s earnings, both Snap and Pinterest don’t top $20 billion in market value. Snapchat’s matrix barely reaches 16.699 million dollars and Pinterest surpasses it with 19.319 million dollars.
Cipactli Jiménez explained that these companies “did not invent anything new and entered the competition too late, Facebook had already cornered the market.”
He added that “their business model does not produce value, when a Snapchat or Pinterest arrives they do not add value to the investing public.”
The expert explained that when these types of companies go public, they are expected to improve their business model and that will boost their market value in the long term; however, that does not happen in many cases.
