The social media sector took a hit this week with an average weekly loss of 3% as FB’s announcement of a new graph search failed to excite investors, sending the stock down 7% (though it is still up 11% in the three weeks of trading of 2013). Despite the negative week, the average return for the social media sector in 2013 is a gain of 5%. EBAY announced solid Q4 results (see below) and next week we will see notable earnings from GOOG, NFLX, and most importantly, AAPL, which has cast a cloud over the entire Internet and media sector during the past six weeks.
The social media sector performed well this week with an average weekly gain of 2% as investors continued to make bets ahead of upcoming earnings. In the next several weeks, several notable companies (including EBAY, GOOG, AAPL, NFLX, YHOO, and FB) will report Q4/12 earnings and set the tone for investor sentiment on the social media and Internet sectors over the next several months.
The social media sector was down an average of 4% this week as it was negatively impacted by Pandora’s Q3 report (as detailed below) and Q4 concerns for AAPL. There was downward pressure on FB shares despite its potential addition to the NASDAQ 100 index next week, which should promote further institutional purchases through rebalancing. GRPN shares surged on Friday on renewed takeover speculation even though there were no fundamental developments.
Netflix has been one of the leading video streaming and DVD delivery services on the web for years, but right now anybody in the online video space will tell you that Netflix is taking its turn in the hot seat — the stock is down from nearly 300 to around 78. The problems started in July, when CEO Reed Hastings — after 12 years of solid management — suddenly thrust a price increase at their nearly 25 million subscribers. Is now the time to buy the NFLX stock?