While we won’t call this a huge watershed moment per se, something nominally interesting in the world of Weird Social Media Things happened this morning: Snap and Twitter are now worth the same based on their market caps.
With some small moves on both companies’ shares, both companies are now hovering around $18.7 billion in market cap. There are some extra mechanics that go into this, but it’s worth noting simply because it’s indicative of both the changing sentiment around Snap and Twitter. On the year, Twitter’s stock price is up around 50%, while Snap’s stock price is down around 35% after it went public earlier this year.
Let’s get to the charts! Here’s Twitter first for the past year:
And here’s Snap:
So, really, this is the tale of two stocks and two companies. Both have shown pretty tepid growth, but with an upgrade 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. Meanwhile, Snap’s stock is in a tailspin 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 changes 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 struggled with getting its story out that it’s ready to make product changes and address 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 enforce new rules around violence and hate, and then an upgrade from a Wall Street firm gave its shares a fresh injection of confidence for investors that are helping it end the year strong rather than limping to the finish line. Twitter shares hit a high on the year earlier this week.
Meanwhile, 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 important because they’re a near-term barometer of sentiment for the company, but also help the companies offer generous compensation packages for incoming employees. That means they can do a better job of attracting talent, which is key for product-driven companies like Twitter and Snap. Both of these companies, of course, will probably tell you they’re focused on delivering long-term value for shareholders and not paying attention to the day-to-day, but it’s still a moment worth noting in the grand scheme of things.