Investing.com - With over 100 million users in just a few days, Meta Platforms (NASDAQ:META) has caused a sensation in the social media world by launching a new chat-based app, Threads, which is expected to compete directly with Twitter. The strategic integration with Instagram allows users to easily connect with their network of followers. However, according to Itaú BBA, although this is a great start, there is still a long way to go before the app becomes definitively popular.
"Threads' journey towards sustained success remains dependent on several factors, including user retention, ongoing platform improvements, and reactions from competitors and regulators", say analysts Thiago Alves Kapulskis, Cristian Faria and Gabriela Moraes, in a report released to clients and the market.
In the analysts' view, Meta has a history of success in launching new social media products, including stories, which compete with Snap (NYSE:SNAP), and Reels, competing with TikTok.
Twitter impacted by changes
According to analysts at Itaú BBA, this is just some of the latest developments surrounding Twitter's "chaotic saga of platform changes, including the removal of content moderation rules, recalibration of content algorithms, and the launch of a paid verification scheme that made it harder to authenticate user identities".
The analysts detail data from Similarweb (NYSE:SMWB) that shows the measures have been driving users away. From July 2022 to June 2023, Twitter saw a 10% drop in monthly active Android users worldwide.
"Twitter has historically been one of the poorest players in terms of digital advertising execution," say the analysts, who believe that Target (NYSE:TGT) would have "an opportunity to capture a good base in a tool potentially powerful enough to become a key top-of-funnel tool for advertisers".
The Itaú BBA has an outperform rating on Meta's stock, with a price target of $280.00, but has not yet included the potentials with the new app in its projections.
At 4:41 p.m. ET on Tuesday, Meta shares were up 2.53% at US$297.89 and BDRs (BVMF:M1TA34) were up 0.82% at R$51.62.
(Translated from Portuguese using DeepL)