Social media stocks start to bounce back | Nightly Business Report

Don’t look now, but one of the hardest-hit sectors in the stock market is getting some of its swagger back. Social media has been on a bit of a stealth-like bull run and some traders are starting to take note.

While there have been individual leaders and laggards among the group, generally speaking, sentiment has been improving. One exchange-traded fund that tracks social media-related stocks—the Global X Social Media Index ETF—closed at a bottom of $16.36 per share back on May 7 of this year, and has since rallied by more than nearly 20 percent.

In other words, a $10,000 investment made less than two months ago has already turned into nearly $12,000. While this particular ETF has around $150 million in net assets, and only trades around 250,000 shares a day, many traders still use it as a proxy for how the industry is doing. That’s because many of the top holdings in the fund are some of the biggest and most well-known names in social media.

Among the top holdings are companies like LinkedIn. Shares of the professional networking site hit a record high of $257.56 back on Sept. 11, 2013, and subsequently lost nearly half their value before bottoming out on an intraday basis at $136.02 on May 7.

Since then, LinkedIn has managed to rally by more than 20 percent, giving it the chance to be tagged as a bull market stock. However, it still needs to rally by 55 percent from current levels to get back toward record highs.

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Facebook has been even more impressive. Shares in the world’s largest social media company have gained 23 percent since hitting a recent intraday low of $54.66 on April 28. That means that it would need to gain just another 8 percent before getting back to its record high of $72.59 which it hit on March 11.

One of the strongest recoveries has been Twitter. The stock hit a post-IPO low of $29.51 on May 7, and the drop had many traders questioning whether or not it would end up falling below the psychologically important $26 initial offering price. Instead, Twitter rose above $40 in Thursday trading for the first time since May 1.

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Social media stocks start to bounce back | Nightly Business Report