Folks, Meta Platforms (META) just made an interesting business decision…
This year, the social media titan doesn’t want you fighting over politics with people you don’t know. At least, not on its platforms. And it’s making major changes to make this a reality.
You likely already know that Meta is the parent company behind Facebook. It also owns messaging app WhatsApp, photo- and video-sharing service Instagram, and Threads – a relatively new competitor to X (formerly known as Twitter).
That easily makes Meta the largest social media company in the world. And it’s estimated that nearly 247 million Americans accessed Facebook last year.
In other words, darn near every American uses one of the Meta-owned apps.
So this politics change is a big deal. After all, we’re heading into what will likely be a very loud, contentious election cycle this year. And for some reason, Meta is making a change.
Let’s take a closer look at that today. And we’ll also check up on Meta in the Power Gauge…
Don’t worry – Meta isn’t banning politics on its platform… or anything quite so absurd.
But it is making a change that could have major implications for its business…
You see, Meta will no longer “push” political posts from accounts that users aren’t currently following. The biggest change is coming to Instagram and Threads, with plans to roll out the same control on Facebook in the future.
There’s no question this will reduce user engagement…
The company learned long ago that negative emotional reactions to posts get attention. And for years, it has “rage baited” users into spending more time on its platforms.
So it’s unquestionable that this change will likely lead to lower “time on site” numbers. But that might be good for Meta in the long run.
In fact, the company has already worked on cooling the political heat on Facebook in recent years. Here’s how Meta puts it on the “Transparency Center” section of its corporate website…
People have told us they want to see less political content, so we have spent the last few years refining our approach on Facebook to reduce the amount of political content – including from politicians’ accounts – you see in Feed, Reels, Watch, Groups You Should Join, and Pages You May Like.
These changes aren’t getting in the way of the company’s stock. As you can see in the chart below, Meta is soaring to new highs…
You can also see in the chart that Meta has blown past its previous 2021 high. And the Power Gauge caught the turn near perfectly.
Today, our system gives Meta a “very bullish” rating. And based on the stock’s relative strength versus the S&P 500 Index, Meta has been outperforming the broad market.
In fact, the stock has soared about 53% over the past six months. The S&P 500 is only up around 12% over that same time frame.
Sure, Meta dialing back on promoting political content will probably lower user engagement on its apps. But it’s not stopping the stock from soaring.
Personally, I welcome the change. Nearly all of us interact with the company’s products… like it or not.
I’d rather spend my time focused on the markets than reacting to a stranger’s political opinion I didn’t need to know in the first place.
Good investing,
Vic Lederman
