Social Media Stocks – Momentum Tech Names Sell Off Again

Social Media Stocks – My point that Amazon was overbought on Tuesday has been proven correct as the stock is down 3.98% in the past 2 days. It fell 1.83% on Thursday.

It was one of many momentum internet names which declined. Apple stock fell 1.66% in anticipation of a potentially higher priced new iPhone which will be launched this month.

Usually the stock rallies before the announcement and declines afterwards. The good news for Apple is the iPhone X had the best resale value out of any smartphone; it lost only 32% of its value after one year.

The next closest device that isn’t made by Apple is the Samsung Galaxy S8 which lost 58% of its resale value after one year.

Micron stock was down 9.9%. The company said at a Citigroup conference that the price of NAND chips, which are flash memory chips used in USB drives and smaller devices, fell in the third quarter.

Besides the semiconductors (SOXX ETF) which had a 2.65% decline on Thursday, the social media stocks had the worst decline in tech.

Social Media Stocks –As you can see from the chart below, the social media ETF was down 1.53% on Thursday. 

The ETF is at a 10 month  low and has been dramatically underperforming the S&P 500. Snap stock fell 3.07% to an all-time low. It’s tough to buy the dip in this name because daily active users are falling and the firm isn’t profitable yet.

Twitter stock was down 5.87%. It is down 14.15% since August 27th and 34.11% since June 14th. I think the stock is a buy.

It is profitable and has been shipping great advancements such as bookmarks and the ability to filter out spam accounts.

Finally, Facebook stock has been cratering as it fell 2.78% on Thursday. It’s down 25.27% since its peak on July 25th. It’s down 10.41% year to date.

I keep saying Facebook will need to explain the new trends in costs and user growth in its next conference call, but investors aren’t giving Facebook a chance to do that as they are selling it every chance they can.