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Social media stocks remain in focus, as the space is reaching new milestones this year. Popular names such as Facebook (FB) and LinkedIn (LNKD) impressed with their performances last quarter, leading to a torrid run in the ETF tracking these companies. In fact, the Global X Social Media Index ETF (SOCL) has surged over 49% in the year-to-date time frame, clearly outpacing the broad technology fund (XLK) and U.S. market fund (SPY) by wide margins. This trend is expected to continue in the coming weeks as more good news is in store for the ETF (read: Social Media ETF on Fire After String of Earnings Beats). Yesterday, the fastest growing social media firm, Twitter, revealed its plan to go public and filed the paperwork with U.S. regulators. This offering would be the worlds largest in the technology space since Facebook went public in May 2012. Following the IPO expected to be completed in early 2014 SOCL would add Twitter in its roster. However, the timing remains unclear as to when Twitter will find its way to the market and then to SOCLs holdings. Twitter IPO: A Boon or Bane for the Social Space? This IPO is likely to prove beneficial for the social media fund. Backing our claim is the initial boom in the social media ETF space when Facebook announced its IPO plans in February last year. The ETF garnered enough investor interest on FB IPO talks with an elevated average daily volume of nearly 50,000 shares (read: 3 ETFs in Focus on Facebook's Earnings Beat). However, after going public in May 2012, Facebook slipped below its IPO price on the second trading session and began sliding more than 18% in just three trading days and nearly 27% in the month of listing. This is because the pricing issue marred the companys transition to being public. Facebook had overpriced its valuation to $100 billion prior to the IPO while its actual valuation was $60$75 billion. Since Facebook was added to SOCL holdings at the close of the fifth trading session following the companys IPO, it took a toll on the ETF returns as well. Coming to Twitter IPO talks, market researchers expect this social media ace to evade the problems faced by Facebook, as the company would adopt a different pricing strategy for its IPO price. Additionally, Twitter will likely benefit from the boom in technology IPOs that we having being seeing lately, as well as the positive sentiment in the space (read: Profit from the Booming IPO Market with This ETF). Moreover, Twitters current valuation is estimated at around $9.0 billion by the Wall Street Journal. This is significantly lower than Facebooks valuation of $100.0 billion at the time of its IPO in 2012. Considering this, investors should definitely keep a close eye on the movement of the social media ETF, both in the weeks ahead, and once the Twitter IPO finally happens (see: all the Technology ETFs here). SOCL in Focus The fund tracks the Solactive Social Media Index, which measures the performance of companies involved in the social media industry, including companies that provide social networking, file sharing, and other Web-based media applications. In total, the product holds 27 securities in the basket and is heavily concentrated across each security. The top three holdings Tencent Holdings, Facebook and Sina Corp together make up for more than 36% of the total assets. In terms of country exposure, U.S. firms take half of the portfolio, closely followed by China (28%) and Japan (13%). However, despite the solid performance and the in-focus nature of the sector, the fund remains relatively unknown. In fact, the product has amassed only $23.7 million in assets and sees light volumes on most days. The ETF charges 0.65% in fees and expenses (see more in the Zacks ETF Center). Bottom Line The Twitter IPO news has come at the perfect time as the social media firms are now enjoying a huge rally. Facebook has now recovered from all the losses that it faced during the troubled IPO times, and it is currently trading at an all-time high. LNKD shares are up more than 170% from their first day of trading, while Yelp is up 150% since its first trade as well. In this backdrop, investors should cautiously watch the performance of SOCL in the tech space. Currently, the ETF has a Zacks Rank 3 or Hold rating, and it is a great barometer for global sentiment regarding social media investing going forward. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Read the analyst report on SOCLRead the analyst report on FBRead the analyst report on LNKDRead the analyst report on XLKRead the analyst report on SPYZacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Originally posted here:
Social Media ETF in Focus As Twitter Plans IPO

Twitter, the seven-year-old social networking and microblogging service company, is going public in a much-anticipated initial public offering that some say could be the biggest IPO since Facebook, and the Global X Social Media ETF ( SOCL | D - 30 ) is ready to add it to its portfolio.

While not much is known about Twitters IPO plans, since the paperwork it filed with regulators kicking off the process is confidential, the Wall Street Journal reported that the company is valued by some estimates at $9 billionan impressive number even if a far cry from Facebooks valuation of about $100 billion when it went public a year and a half ago.

But when it goes public, Twitter will join a booming segment of the market anchored by Facebook, whose share price has reached record highs in recent days. That share-price movement all but puts behind it its own infamous IPO on May 17, 2012, that was mired by technical glitches and was followed by a precipitous share price decline in the following months.

Since the beginning of the year, Facebooks share value has nearly doubled, riding, among other things, strong upward momentum in equities.

SOCL is the only ETF in the market today to focus exclusively on social media companies, and as such, it was one of the first to add Facebook to its portfolio just five days after the social media giant went public. Today Facebook represents about 12 percent of the funds exposure.

This time around, the ETF, which tracks a Structured Solutions modified market-cap-weighted index, will again lead the charge in owning Twitter shares, a company spokesman told IndexUniverse. But details regarding the full allocation are still unavailable. Its safe to say that Twitters weighting in SOCL will be based on the companys market capitalization after the IPO, given the indexing methodology.

While the fund remains small, with about $25 million in assets, its performance has been nothing short of blockbuster so far this year. The fund has benefited from Facebooks rally, and overall strength in equities, tacking on gains of 47 percent year-to-date, far outpacing the broad stock market.

Social Media in general is performing very well, as illustrated by SOCL, Bruno del Ama, head of Global X Funds, told IndexUniverse.

Twitter obviously wants to come to market in an environment where social media companies are demonstrating that they can implement on their business models by growing rapidly, showing significant profitability and the high moats or defensibility of these social network businesses, he added.

Its worth noting that SOCL is very narrowly focused, and it doesnt include big technology names like Apple, Microsoft and IBM.

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Twitter To Go Public; SOCL To Own It

Social networks have proved more effective than traditional media outlets in influencing public opinion over the last two years.

Salim Al-Ruwaily, an academic media specialist, attributed the impact of social networking to the increasing complexity of modern societies and the growing power of public opinion. Such factors have allowed social networking to gain the support, cooperation and trust of audiences and have become effective in persuading viewers.

Social media platforms, especially Facebook, Twitter and YouTube, have essentially pulled the rug from beneath traditional media, Al-Ruwaily said.

He said that the Saudi society, which is the largest and most active online community in the Arab world, has directly contributed to the influence of social networks in rallying people behind causes.

According to recent studies, public relations experts have become more involved in social media campaigns because they have emerged as the most effective means of communicating and reaching a wider segment of the target audience with an inexpensive budget.

Marwan Saadat, who works with a local public relations firm, commends social networking sites for their ability to deal with news and events promptly and in the spur of the moment.

In addition, information is easily exchanged between friends via pictures and videos, and these networking sites allow others to contribute their comments in a free and user-friendly way, whereas these features remain absent in traditional media, Saadat explained.

Even satellite TV channels have their limitations as viewers can only contribute after the news is published online.

According to Saadat, the use of social media sites is not limited to individuals, but has also expanded to be used by officials, politicians as well as private and public institutions in many countries.

Moreover, as a result of the peoples appetite for online shopping, the proportion of ads and e-campaigns on websites has increased, thus allowing for a significant increase in profits.

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Social networks prove more persuasive than mainstream media

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May 23, 2013 at 2:48 PM ET

Courtesy of LAPTOP

Ashton Kutcher at the CTIA wireless industry trade show in Las Vegas May 23, 2013, speaking with CNBC's Julia Boorstin.

Actor and tech investor Ashton Kutcherwas on hand at CTIA 2013 to discuss his views on the mobile industry and social networking. During the keynote Thursday in Las Vegas, Kutcher was asked how he thought Twitter was monetizing the mobile market. The star of the upcoming film, jOBS, said the media messed up the social network.

Kutcher, who is extremely active on Twitter, said his experience with the social network has taken a turn for the negative. It used to be a personalized experience that I could share, he said. I think media [bleeped] it up. Theres a lot of people selling [another word for stuff] that I dont want in my feed. Maybe I need to curate my feed better. When I first started using it it felt like the democratization of media.

Kutcher said the tipping point for his relationship with Twitter was when the social network made retweeting easier with the retweet button. When they added the retweet button, it created a lot of noise in the system that hurt the experience, he said.

Kutcher isnt completely down on the social network. He said he believes Twitter will become valuable when it can integrate with intelligent objects, such as buses and coffee makers that can tweet at you when the next bus is scheduled to arrive or when your coffee is done.

More: Best of CTIA 2013 Awards

Kutcher has invested in startups including Airbnb, Path, Square and a host of other mobile apps and services. His appearance at CTIA came on the heels of Jennifer Lopez Viva Movil retail chain announcement for the Latino market. So while this years CTIA may have been light on major product announcements, it certainly wasnt lacking in star power.

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Ashton Kutcher: Media has messed up Twitter