Investing in Social Media Stocks

The battle between the largest social network entities, Facebook, LinkedIn and Twitter is intensifying as all three sites are going through changes as users are migrating from one to the other and the competition is getting fierce. Luckily for Binary Options investors, most brokers have social media stocks in their selection.

In a brilliant IPO the microblogging site Twitter’s stock shot up on NYSE debut and closed with 73 per cent – making a good ROI for investors who invested in its initial public offering price of $26 per share.

The firm, which bases its model on 140-character messages, accumulated $1.8 billion in an intensely observed IPO. Disbelievers were left flabbergasted as the appraisal of the company, still until today unable to make a profit, climbed to over $25 billion even as other tech firms like Facebook and LinkedIn finished 2-4 per cent lower on the same day.

Nonetheless, the momentum to buy Twitter shares seem to be deteriorating and experts have started to wonder if the company’s current valuation is realistic considering that Facebook and LinkedIn boast healthier margins.

After closing at $44.90 on November 7, Twitter share price has been unsuccessful in reaching new heights and has started December with a $41.57 per share, signifying a significant drop from November 7.

Beside the hit on share value, volumes have gone down as well. From 117 million shares traded on the day of the IPo, the number of shares traded on a daily basis has dropped by a million since the IPO.

In deep divergence, U.S. markets have edged up throughout the same period as economic recovery has started to take root.

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