Investors Scramble as Social Media Companies Lose Members

Photo by Jeremy Bezanger via Unsplash

Investors Scramble as Social Media Companies Lose Members

By Movieguide® Staff

Experts say that investor loyalty could falter after first-quarter financial results for major social media companies Twitter, Meta, and Snap show continued decline.

According to Variety, Q1 results for major social media platforms posted their third consecutive quarter of financial decrease. Moreover, video-sharing giant YouTube’s ad revenue decreased “significantly,” the outlet reported.

The article sites the conflict in Ukraine, inflation, and higher interest rates as some of the factors that could contribute to diminished ad budgets.

The outlet reported that Snap stock fell by 40% while Meta’s dropped by 38%. Due to the impending purchase of Twitter by Tesla CEO Elon Musk, the social media giant reported an increase of almost 15%.

Variety notes that investors are no longer assured of guaranteed profit from Meta and the industry’s top social networks.

“The big question is whether investors will have the patience — and stomach — to stick around to see the social companies pivot their businesses to recapture the growth-stock-like returns they once did,” Variety reported.

Another reason for the steady decline could be the renewed legislative efforts to protect minors’ mental and physical health online.

In the past year, politicians worked together to address mental health issues and cut down on sexually exploitative content on social media; often first highlighted by organizations like NCOSE and Exodus Cry.

Read More: States to Launch Massive Investigation Into TikTok’s Potential Harm To Children

Movieguide® previously reported:

The National Center on Sexual Exploitation praised the EARN IT Act as the “best piece of tech accountability.”

“With child sexual abuse material (CSAM) exploding on the internet, tech companies should eradicate it from their platforms. But tech companies currently have no incentive to prevent or eliminate CSAM. The EARN IT Act is the best piece of tech accountability legislation to ensure tech companies do the right thing,” said Dawn Hawkins, CEO of the National Center on Sexual Exploitation.

“We are pleased that this updated EARN IT Act addresses others’ concerns about encryption. But most importantly, this bill will ensure that tech companies finally address, prevent, and end this horrific criminality. Tech has the capability of doing so but needs Congress to hold it accountable,” Hawkins said.

Read More: Facebook Took ‘No Action’ Against Drug Cartels, Human Traffickers Who Used Platform to Recruit