Meta stock jumped more than 1 per cent on Thursday before dropping 0.35 per cent, following the launch of the new Twitter competitor Threads on Wednesday.
The stock, which was trading at $293.94 a share at 2:33pm New York time (10.33pm UAE time), surged almost 2 per cent in pre-market trading.
The stock opened up at $295.89 from its previous close of $294.37, and touched a high of $298.12 in early trading, before slipping marginally by 0.35 per cent.
Threads, which saw 10 million sign-ups in the first seven hours of the launch, grew to 30 million in less than 24 hours. By comparison, Twitter’s current user count stands at nearly 300 million.
“Wow, 30 million sign-ups as of this morning. Feels like the beginning of something special, but we have got a lot of work to build out the app,” said Mark Zuckerberg, chief executive of Meta.
Mr Zuckerberg already has 1.3 million followers on Threads.
Shares of Meta jumped 2.9 per cent to $294.37 on Wednesday after the company announced the timing of the launch of the app.
“Meta has made it no secret that it wishes to poach Twitter’s clientele on to Threads with the aim of attracting over one billion users,” said Vijay Valecha, chief investment officer at Century Financial.
“Meta could capture substantial consumer engagement down the line if takes efforts to minimise the distribution of misinformation and disruptions to conversations.
“Moreover, its one-click sign-up and import of information from Instagram and simple user interface is an attractive selling point.”
Facebook, Instagram and WhatsApp’s parent firm Meta, which reported a 24 per cent annual decline in first-quarter profit, is looking at ways to diverse its revenue streams and advertising earnings.
“So far this year, Meta has successfully lowered its operating expense by $3 billion due to its cost discipline and recent spate of layoffs of 25 per cent of its workforce,” Mr Valecha said.
“However, it faces several cash flow headwinds, especially after its Reality Labs segment delivered annual losses between $14 billion and $16 billion.
“Meta’ valuation is at a discount to its sum-of-the-parts [SOTP] valuation. This needs to be rectified and can be achieved by monetising WhatsApp and Instagram.”
SOTP is a process of valuing a company by determining what its aggregate divisions would be worth if they were spun off or acquired by another company, according to online financial encyclopaedia Investopedia.
Industry analysts are bullish about Meta’s stock after Threads launch. Threads' global release on both Google's Android and Apple's iOS operating systems addresses any potential adoption restraint.
The company’s stock price objective has been raised to $335 by KeyBanc Capital Markets analyst Justin Patterson, suggesting a more than 13 per cent jump from the current levels.
