Meta Platforms (META) -) shares moved higher Monday following data suggesting its new social media platform, Threads, gained more than 100 million users since it launched late last week.
Data from Quiver Quantitative, published Monday, showed Threads had topped the 100 million mark just five days after Meta launched the Twitter-like platform in more than 100 countries late last week. The pace of new user growth, believed to be a new app record, compares to the nearly two months took OpenAI's ChatGPT, which is partly backed by Microsoft (MSFT) -), to reach the 100 million milestone.
"Threads reached 100 million sign-ups over the weekend, " CEO Mark Zuckerberg said Monday on the Threads app. "That's mostly organic demand and we haven't even turned on many promotions yet. Can't believe it's only been only been 5 days!"
Meta shares were marked 1% higher in early Monday trading, against a 0.21% decline for the Nasdaq, to change hands at $293.24 each.
The rapid growth of Threads, while significant enough to elicit a 'cease-and-desist' letter from Elon Musk's Twitter counsel, Alex Sprio, as well as an increasingly juvenile spat between the Tesla (TSLA) -) CEO and Meta boss Mark Zuckerberg, likely won't translate to a near-term revenue impact for the social media giant.
You will get more laughs from this app than everything else combined
— Elon Musk (@elonmusk) July 10, 2023
But I have to warn you … don’t be shocked … there’s some negative stuff too
That said, Threads, which is now approaching around one-third of Twitter's 350 million active users, could add between $800 million and $6.7 billion to Meta's overall top line in 2024, according to a recent client note from KeyBanc Capital Markets analyst Justine Patterson.
European Digital Markets Act rules, meanwhile, have prevented the app from launching across the world's biggest economic bloc, a condition that Meta is unlikely to challenge given its recent court defeats related to the use of private user data to sell targeted ads.
"While we see (new users) growing exponentially in the coming months, exclusion from the EU initially (regulatory changes from DMA) will temper upside potential for now,' said CFRA senior equity analyst Angelo Zino, who carries a 'buy' rating with a $350 price target on Meta stock.
"We believe META timed the launch well given a slew of issues at Twitter since Musk's takeover and appetite for many to have an alternative option," he added.
The launch of Threads followed a series of controversial changes to the Twitter website, unveiled over the weekend, that limit the number of Tweets both verified and unverified users can see each day.
The changes are part of an effort led by Musk, Twitter's controlling owner, to counter what he called "extreme levels of data scraping & system manipulation" on the microblogging website.
New Twitter CEO Linda Yaccarino, who joined the group from NBCUniversal in June, said that Twitter needed to make a "big move to keep strengthening the platform. That's a view echoed in a company statement that said the steps were taken to "ensure the authenticity of our user base."
Meta, meanwhile, has been able to leverage the massive 3 billion base of active users across its family of apps, which includes Facebook, Instagram and WhatsApp, to grow the Threads platform.
