What happened

Buy the rumor, sell the news: That seems to be both the mantra and the lament of investors in social media star Meta Platforms (META 0.46%).

Over the weekend, both the rumors and the news sounded pretty propitious for Meta, as Threads, the company's just-introduced answer to Elon Musk's Twitter, has rocketed quickly to 100 million subscribers just five days after it was launched.

Sucked in by the enthusiasm, investors bid up Meta stock more than 2% this morning. But by 12:15 p.m. ET on Monday, it had already given up those gains, and was falling into the red, down 1.1%.  

So what

As TechCrunch reported this morning, the other numbers on Threads were equally impressive: 2 million sign-ups two hours after launch, 5 million subscribers after four hours, and 10 million after seven hours. So enthusiasm for the new service seemed to build, and sign-ups accelerated, at least on Day 1.

Five days later, however, things are starting to settle down. On the one hand, 100 million new users in five days beats out ChatGPT to make Threads the fastest-adopted app in history. (It took ChatGPT two months to hit 100 million users).

On the other hand, Threads is now attracting users at slower than the original rate of over 1 million per hour. So Threads' acceleration has already stopped, and indeed shifted into reverse.

Now what

And Meta had a pretty big installed base to work off of. According to Statista, 3.8 billion people were using one of Meta's several apps at the start of this year. That made for a large audience for the company to market its newest app to. And so far, only 2.8% of those customers have signed up for the Twitter lookalike.

You also have to assume that a lot of these initial subscribers are looky-loos and land-grabbers, just claiming profiles on Threads to see what the service is and make sure they get the usernames they wanted -- not necessarily long-term or active users of the service.

As TechCrunch said, it remains to be seen how many of these first 100 million Threads users will stick around: Keeping users and monetizing them "will be the real challenge."

With Meta stock already up more than 130% this year, and trading at a pretty sizable 36 times trailing earnings, investors don't seem convinced just yet that there's enough upside from Threads to justify paying even more for the stock.