The Global X Social Media ETF (NASDAQ:SOCL) lost ground in Friday’s early trading following poorly received financial figures from Snap (SNAP) and more headlines in the ongoing Elon Musk-buyout drama for Twitter (TWTR).
SOCL, which is among the most closely watched of the benchmark ETFs for the social media space, dropped 3.6% Friday morning. With the decline, the fund, with its 43 holdings and 0.31% expense ratio, added to weakness it has seen all year. The ETF has cratered 52.8% year-to-date, which is more than double the losses the S&P 500 (SP500) has experienced.
The selloff in SOCL is fueled by a handful of the fund’s key holdings. Shares of Twitter (TWTR), Meta Platforms (META), Pinterest (PINS) and Snap Inc. (SNAP) together represent more than a third of SOCL’s holdings, at a combined weighting of 34.17%. All three have tumbled on Friday morning.
Shares of SNAP have been the main catalyst for SOCL’s decline, as the social media company reported its lowest sales growth to date. SNAP represents the ETFs 12th most significant portfolio position, with a weighting of 4.02%. Shares have plunged 31.2% early Friday on the earnings news.
TWTR, the fund’s top position with a 12.83% weighting, is lower by 4.8%. Twitter was the source of ongoing scrutiny on Friday, following reports that U.S. authorities might look at Elon Musk’s pending buyout of the firm. There were separate reports that the billionaire plans to lay off as much as 75% of TWTR’s workforce. Both reports have since seen pushback from other sources.
META and PINS are SOCL’s third and fourth largest holdings at 9.99% and 7.33%, respectively. Facebook parent Meta, which has earnings due out next week, has slipped 3% in Friday’s early going. PINS has fallen 9.2%.
Looking at the aftermath of SNAP’s earnings, see why Seeking Alpha contributor Michael Wiggins De Oliveira says the results represent “a sign of things to come in tech.”