What happened
Following Tuesday's stock market rout, investors were in a mildly better mood Wednesday, with the S&P 500 index inching up by 0.3%. That brightening sentiment didn't help Meta Platforms (META +0.22%), however, as the social media giant's stock sank again -- it closed the day more than 1% lower.
So what
On Tuesday, investors bailed out of tech stocks largely due to inflation fears. In most cases, there weren't necessarily any company-specific developments contributing to their downward movement.
That wasn't quite the case with Meta. Investors remained concerned about a new research note published by investment bank Morgan Stanley about social media and video sharing trends in August. Analyst Brian Nowak found that the total time spent by users on Meta's sites was down by 3% year over year during the month, the second time in a row that occurred.
Of those sites, Instagram was particularly affected by this trend. Nowak said that the photo-sharing platform suffered an 8% decline in time spent. This, he wrote, "is particularly troubling as we were optimistic that META's 'reversal' in strategy throughout July (a slower push toward short-form video and still-high focus on social graph) would have helped August trends improve versus July."
NASDAQ: META
Key Data Points
Now what
Compounding this, it seems that Meta's loss was its competitors' gain. Nowak noted that TikTok's average user time spent grew by approximately 4% in August, on the back of a rise in U.S. daily users by around 5%. Also in the video posting realm, Alphabet's YouTube saw a bump in user time spent, although it wasn't clear exactly by how much.
