Since the inception of TikTok, the lip-sync app, there has been an ever-evolving social media war between Facebook and TikTok where Facebook (NASDAQ:FB) seems to be a clear winner. Though Facebook’s year-to-date haul of about 40% lags behind Snap’s brilliant 138% rally and Twitter obtains free marketing from the biggest office, yet none can beat the social media network that has been created by Mark Zuckerberg. To speak about its worth, we have to mention the 2.5 billion monthly active users of this social networking site, which is 31% of the population of the entire world (7.7 billion). Hence, if it can be said that purchasing Facebook stock is similar to buying a share of the whole world, it won’t be an exaggeration.
The demographic distribution of Facebook stocks is a rather critical one, much unlike the rivals like Snapchat which usually cater to only the younger audience. There is more balance in the audience of FB. In fact, according to a study by the Pew Research Center, 85% of the internet users between the age of 18 and 30 used Facebook. On the other hand, for the users aged between 30 and 50, the allocation dropped to just 80%.
Another 65% of internet users between the age of 50 and 64 use Facebook and for the group of audience above the age of 65 years, the distribution is still high at 48%. With these statistics, one can easily understand the bullish theory of Facebook stock. There’s no denying the fact that social media is all about people and the more people you’re connected to, the more relevance your platform will gain. Relevancy also has a direct relation with luring advertisers.
TikTok vs. FB stocks
Of late, there was a report from CNBC that said that TikTok was busy poaching the employees of Facebook. You must be wondering about the reason behind this behavior of TikTok. Well, the Chinese parent company named ByteDance made this the latest trend in the world of social media. As per the demonstration of Alphabet’s YouTube platform, there is actual demand in these online platforms. TikTok showcases countless amateur singers, actors and musicians and they also let them post original material. It can also be said that the contributors are sometimes too good.
For the few lucky people who have the capability of turning heads on this app, they earn a record deal as well as gain social media fame. TikTok is an attractive gig for talented people and there have been several rising stars that have been able to make their mark in the industry due to this platform. Possibly the biggest threat to Facebook stock is that TikTok is famous among the young generation, exactly that for which Facebook bought Instagram. For Apple iPhones, TikTok is the most downloaded app and till now the company has more than 1 billion downloads.
Should investors panic about FB stocks?
Though the TikTok phenomenon is something that is to be respected, it is not that people are too much into this trend. The parent company might be stealing employees and hence this can be viewed as personal opportunism. On the contrary, the biggest drawback of TikTok apart from demographic imbalance is its functional restraints. The consumer driver in case of TikTok is the budding entertainers. People may initially get attracted but this won’t be sustainable as a long-term platform.