Twitter Vs. The Zuck
Mark Zuckerberg’s Threads was released a couple of days ago to compete directly with Elon Musk’s Twitter. Threads reached 30 million users within 18 hours and Elon Musk promptly delivered a lawsuit. Musk’s lawsuit alleges that Meta stole fired employees from Twitter and used their expertise to make a competing app. I assume Musk is suing to enforce non-compete clauses, but it doesn’t matter if he won’t win. It seems as if Twitter and Musk have been blindsided by this but it doesn’t matter.
Twitter is an awful company, poorly run and poorly managed. They’ve only recorded a profit a couple of times before being taken private and I honestly don’t know why Meta would attempt to replicate their business model. The entire Twitter business is to get people as emotionally charged as possible which puts them in a pretty bad mood to click on ads. If Threads is intent on directly mimicking Twitter they won’t make much money which is why they will spend the next two-three years lurking and changing their model around until they find something that works. The only thing preventing Threads from becoming a Tumblr or a failure of similar proportions is a lot of money.
If you’re a Meta shareholder, first of all, why? Second of all this will have minimal impact. I don’t think this is just a grudge thing against billionaires that despise each other and I believe Meta genuinely thinks they can make money but they are mistaken. Social media is an already cramped field, and Threads will lose all traction in the coming months. Don’t sell your stock however, I wouldn’t expect Meta to spend much money on Threads at all espescially compared to the dump trucks of cash they have burned for virtual reality. They just saw a competitor crumbling and took the opportunity to pounce. Twitter lacks the resources to truly fend Meta off and Meta lacks the ability to care enough to wipe Twitter off the face of the planet.
If you are a prospective buyer with some cash in hand, don’t let this impact your choice to buy or sell Meta at all. While you already shouldn’t be buying Meta stock (they’re an awful company) Threads will have minimal impact on current or future Meta revenue. They may lose a billion here or a couple hundred million there, but eventually, they will either shut this down and it will be labeled a failure or they will surpass Twitter and still barely break even. Final verdict: this does not matter.
