Concerns over the dangers of social media have been becoming more and more prominent. Could this potentially impact shares in companies like Meta?
In Ireland, Norma Foley, the Education Minister, is advocating for social media platforms to implement warnings similar to those found on tobacco products. Although global investors are unlikely to be perturbed by Ireland’s plans, one could anticipate some reaction to a recent opinion piece by US Surgeon General Dr Vivek Murthy in the New York Times. In it, Dr Murthy recommends warnings highlighting the link between significant mental health risks for adolescents and social media use, and calls for restrictions on features like push notifications, autoplay videos, and infinite scroll, which, according to him, exploit young minds and promote overuse.
Prominent social psychologist Dr Jonathan Haidt has been championing such actions, cautioning in his popular book The Anxious Generation about the role of social media in the perceived mental health crisis among adolescents. Nonetheless, there are those who dismiss this as a hysteria, contending that the evidence is far from conclusive.
Regardless, it seems investors are unfazed. Following Dr Murty’s article, Meta’s shares took a minor hit but finished the day slightly up. Shares in Snap climbed, whereas Reddit saw a small decline, and the Global X Social Media ETF remained unchanged by the day’s end.
Significantly, just five months back, Mark Zuckerberg, the head of Meta, along with executives from TikTok, Snap, X and Discord were subject to intense questioning in a Congress hearing, the focus of which was Big Tech’s role in the online child exploitation crisis. It was a touching session, with Zuckerberg issuing an apology to bereaved parents with pictures of their children who took their own lives after online harassment.
This didn’t yield positive optics, but nonetheless, Meta’s shares have surged 25 per cent since. Apparently, investors are not overly anxious about impending social media regulation.