Something interesting happened in the world of Weird Social Media Things this morning: Snap and Twitter are now worth the same based on their market caps.
With some minor moves on both companies’ shares, both the companies are now suspended around $18.7 billion in market cap. There are some extra processes that go into this, but it’s worth noting simply because it’s suggestive of both the shifting sentiment around Snap and Twitter. On the year, Twitter’s stock price is up around 50%, while Snap’s stock price plummeted around 35% after it went public earlier this year.
So, really, this is the tale of two stocks and two companies. Both have shown pretty lukewarm growth, but with an advancement a few days ago that sent Twitter shares soaring, it may be that Twitter has been able to turn the narrative in such a way that investors are looking at the company in a new way. In the meantime, Snap’s stock took a nose-dive after being one of the big blockbuster IPOs this year that’s ended up a bust. Snap’s growth, too, is tepid, but with product variations on the way, it seems like it still needs to figure out a way to turn that story around.
Twitter for most of the year fought with getting its story out that it’s ready to make product changes and speak about problems around abuse and harassment that have hounded it for years (and have become increasingly salient this year). But on Monday it said it is starting to impose new rules around violence and hate, and then an upgrade from a Wall Street firm gave its shares a fresh dose of confidence for investors that are helping it end the year strong rather than wobbling to the finish line. Twitter shares hit a high on the year earlier this week.
In the meantime, it seems like Snap’s post-IPO period has just been a string of very bad days as it hasn’t seemed to show the kind of growth that Wall Street expects for the fresh IPO. Granted, newly-minted public companies can have especially volatile stock prices — we have a couple years to work with for Twitter and less than a year for Snap — but missing its first quarter out the gate definitely has not helped the company.
These stock prices are still significant because they’re a near-term indicator of sentiment for the company, but also help the companies offer substantial compensation packages for incoming employees. That means they can do a better job of enticing talent, which is key for product-driven companies like Twitter and Snap.
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