Bipartisan group of attorneys general request Surgeon General warning for social media, Snap sued for ‘sextortion’ and other notable stories from this week
Welcome to “StockTok,” The Fly’s weekly recap of Wall Street’s reactions to social media stock news.
NOT UP FOR DEBATE:
Shares of former President Donald Trump’s company that owns Truth Social were lower in premarket trading after last night’s presidential debate. Trump Media & Technology Group (DJT) was down $2.23, or 12%, to $16.40.
SHARE SALE:
In a regulatory filing, Meta Platforms (META) disclosed that its COO Javier Olivan sold 522 shares of common stock on September 6th in a total transaction size of $215.6K.
SURGEON GENERAL WARNING:
A total of 42 U.S. state attorneys general asked Congress for a Surgeon General warning label for social media apps. The letter to congress by the group said in part: “We, the attorneys general of the 42 undersigned states, write in support of the United States Surgeon General’s recent call for Congress to require a surgeon general’s warning on social media platforms. Young people are facing a mental health crisis, which is fueled in large part by social media. As Surgeon General Murthy recognized, this generational harm demands immediate action. By mandating a surgeon general’s warning on algorithm-driven social media platforms, Congress can help abate this growing crisis and protect future generations of Americans. As State Attorneys General, we sometimes disagree about important issues, but all of us share an abiding concern for the safety of the kids in our jurisdictions algorithm-driven social media platforms threaten that safety. A growing body of research links young people’s use of those social media platforms to a variety of serious psychological harms, including depression, anxiety, and suicidal ideation…. Many of us are also investigating TikTok for similar misconduct. And some states, including Arkansas, Indiana, Iowa, Kansas, Nebraska, New Hampshire, and Utah-have already commenced litigation against TikTok for violating their state’s consumer protection laws. These enforcement efforts are a pivotal step to protect the well-being of our nation’s youth and demonstrate the bipartisan concern for this critical issue.”
UPDATED:
Sprout Social (SPT) announced a series of updates and AI-powered innovations that further enhanced Sprout’s platform and strengthen the company’s partnerships and integrations with Salesforce (CRM) and major social media networks. Many of these updates will be featured in Breaking Ground, Sprout’s quarterly showcase of the company’s latest product innovations.
ANTITRUST LATEST:
The U.S. DOJ’s case against Google’s (GOOGL) ad business accusing the company of abusing control of its ad technology and violating antitrust law may benefit Meta, Amazon (AMZN), and news organizations that pay Google a cut of revenue for brokering their website ads, including Gannett (GCI) and News Corp (NWSA), The Washington Post’s Eva Dou and Salvador Rizzo reported.
INTEGRATION:
Verb Technology Company (VERB) has completed and launched a technology integration and strategic vendor relationship with global social media platform Pinterest (PINS). This initiative leverages Pinterest’s one-half billion monthly active users and evidences Verb’s commitment to amplify MARKET.live’s social shopping reach for its growing list of consumer brand clients across platforms. Pinterest’s user base has grown consistently year-over-year, adding nearly 50M monthly active users from 2023 to 2024.
SEXTORTION LAWUIT:
New Mexico Attorney General Raul Torrez announced the filing of a lawsuit against Snap (SNAP) to protect children from “sextortion,” sexual exploitation, and harm. In the lawsuit, the New Mexico Department of Justice describes how Snapchat’s policies, “seemingly ephemeral content, and recommendation algorithm foster the sharing of child sexual abuse material and facilitate child sexual exploitation.” “Our undercover investigation revealed that Snapchat’s harmful design features create an environment where predators can easily target children through sextortion schemes and other forms of sexual abuse,” said Attorney General Torrez. “Snap has misled users into believing that photos and videos sent on their platform will disappear, but predators can permanently capture this content and they have created a virtual yearbook of child sexual images that are traded, sold, and stored indefinitely. Through our litigation against Meta and Snap, the New Mexico Department of Justice will continue to hold these platforms accountable for prioritizing profits over children’s safety.”
DA Davidson initiated coverage of Meta. The firm called Meta a top pick within the mega-cap space, citing its “combination of emerging leadership in the most important future technology platforms and an attractive relative valuation.” Aside from Alphabet, Meta is the least expensive mega cap, even before factoring for the option to sever Reality Labs losses, which would take the multiple down to 16-times, “thus providing downside protection,” the analyst told investors in a research note. Davidson said it will be monitoring short term challenges such as tougher comps, reliance on Chinese shlock-hawkers and the upcoming election cycle.
Cantor Fitzgerald initiated coverage of Snap. The firm noted investing in Snap requires a “reasonable confidence” in the company improving its advertising business steadily, while navigating near-term market headwinds well, and delivering margin expansion over the next 12-18 months. This is a “tall order for a sub-scale business in digital media overshadowed by the Big Two,” the analyst added. The firm also initiated coverage of Pinterest. Shares have been on a rollercoaster in 2024 and currently lag Nasdaq year-to-date despite FY25 revenues and EBITDA being revised higher, the analyst told investors. The investment community is skeptical of the growth outlook after the company’s light Q3 guidance, but the firm believes Pinterest has “many promising initiatives in early stages that should help sustain growth.”
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Originally Posted September 11, 2024 – StockTok: Trump Media shares taper following last night’s presidential debate
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