Forget Facebook, Snapchat, Twitter: TikTok Is The Breakout COVID-19 Social Media Platform
Social media has been one of only a handful of sectors that is benefiting from the stay-at-home environment. Social distancing has forced social interactions online for the time being, but investors looking to capitalize on the surge in social media usage be surprised at the big winner.
On Friday, DataTrek Research co-founder Nicholas Colas said the biggest social media winner from the COVID-19 era isn’t Facebook, Inc. (NASDAQ:FB), its subsidiary Instagram, Snap Inc (NYSE:SNAP) or Twitter Inc (NYSE:TWTR).
Instead, teen-oriented video platform TikTok has seen the biggest surge in Google search volume over the last 90 days. TikTok is owned by the private Chinese company ByteDance.
Social Media Search Numbers
Colas said Facebook and Twitter saw only a small bounce in worldwide Google search volume since global lockdowns went into effect. In the chart below, searches for Snapchat have demonstrated a similar trend, while searches for TikTok have steadily risen over the last 90 days.
“TikTok has yet to prove it can be profitable or relevant outside its core global teen user group, but it certainly has the right entertainment product for the times,” Colas said.
Unfortunately, there’s no direct way for Americans to invest in TikTok or ByteDance.
ByteDance was reportedly valued at around $75 billion in 2018 prior to TikTok’s meteoric rise in popularity. Apptopia recently reported that TikTok’s in-app purchase revenue skyrocketed 310% in the fourth quarter, and ByteDance is rumored to be a potential 2020 IPO candidate.
If ByteDance eventually pulls the trigger on an IPO, investors need to tread carefully. As Snap IPO investors know all too well, popularity doesn’t necessarily translate to strong stock performance, and a younger customer base can be particularly fickle when it comes to what’s trendy in social media.
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Screenshot from the App Store.
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