As Facebook (FB) got entangled with data privacy concerns, whistleblowers, and global outages, rival social media companies outperformed. Let's turn the spotlight on a particular star: Snapchat (SNAP), which saw its shares surge more than 50% in 2021. Compare this with Facebook's mere 20% advance — obvious, isn't it?
Moreover, the gap between the two social media giants widened considerably over the past month when Snapchat saw its shares rise 2% while Facebook's plunged more than 10%. During Facebook's power outages, Snapchat's time usage jumped more than 20% — and yes, Twitter's went up too… so we could be stretching it by just associating its growth with Facebook's recent problems.
On a side note, Snapchat is becoming more of a go-to platform for digital advertising as Facebook's ability to sell targeted ads has been severely limited by Apple's new privacy policy. Not to mention, Snapchat offers considerably lower ad prices compared to Facebook.
Why it matters
The earnings season for social media giants in the US is coming up next week, and the widening gap between Snapchat's and Facebook's performance may increase even further. Snapchat is expected to post a revenue increase above 60%, while Facebook needs to hit at least a 35% growth to calm down worried investors (we'd reckon, at least).
