Twitter Inc (NYSE:TWTR)’s stock price has been consistently increasing after the values dropped significantly back in May. On Tuesday, Twitter shares again faced a reversal of trend and declined by around 6%. All major social media companies also encountered a decline in their prices. Global X Social Media (NASDAQ:SOCL) which tracks performance of all companies in social media industry also fell by 4% on Tuesday. Julia Boorstin of CNBC discussed about the major social media stock sell-off.
Boorstin said that we are witnessing a major social stock sell-off. She feels that this is reversal of social media stock trend from the past month.
She also reported the stock prices of other social media giants. LinkedIn Corp (NYSE:LNKD) has declined by 6.5%, Yelp Inc (NYSE:YELP)’s shares are down by 7% and Facebook Inc (NASDAQ:FB) lost 4%. She also pointed out at another social media giant, which is currently facing similar fate, Pandora Media Inc (NYSE:P). Pandora’s stock was down 6%, and lost 10% earlier on Tuesday.So it is not just Twitter Inc (NYSE:TWTR) in the losing race.
She added that Pandora has persistent concerns with their competition and licensing cost. Licensing costs could still increase if Taylor Swift’s vision on music industry comes true.
“Music is a valuable thing that should be paid for. Individual artists and their labels will someday decide what an album’s price point is”, Swift wrote on an Op-Ed in Wall Street Journal.
If Swift’s vision comes true, we will see lot more YouTube Celebs and Vine Stars getting record deals. Boorstin said that like Swift, many other artists may increase their royalty rates too. But Pandora Media Inc (NYSE:P) actually wanted to cut cost on this to get bigger margins. So if Swift wins in achieving her vision, it will be a big loss to Pandora. Interestingly shares of Twitter Inc (NYSE:TWTR) are going down as the world cup reaches the final stages.