Social Media Round-Up: Facebook Wins Trademark Battle; Twitter Takes on the Feds

Social media stocks Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR) are both making headlines today

by Josh Selway

Published on May 9, 2016 at 10:39 AM
Updated on Jun 24, 2020 at 10:16 AM

Social media stocks Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR) saw markedly different post-earnings reactions on Wall Street last month. Whereas FB dashed to all-time highs, TWTR has hit record lows. Today, neither stock is making any headway, with FB last seen off 0.3% at $119.12, and TWTR down 0.8% at $14.29, amid a recent round of news. 

Starting with FB, traders are considering the implications of the company's legal win in China -- where Facebook services are banned. Specifically, the company won a trademark battle against another firm that had registered the name "face book." Surprisingly, the shares aren't capitalizing on the news, but are still up 52.6% over the last 12 months. 

Options traders have been betting on additional gains in recent weeks, as call buying has been more popular than put buying -- on an absolute basis -- at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Analysts are also bullish, with 32 of the 33 brokerage firms covering Facebook Inc (NASDAQ:FB) calling the stock a "buy" or better. 

As for TWTR, the company has reportedly prohibited business partner Dataminr -- which sifts through tweets in real-time to identify noteworthy trends and events -- from working with the U.S. government. The decision not to comply with the feds echoes Apple Inc.'s (NASDAQ:AAPL) iPhone spat with the FBI

In the meantime, options traders are still waiting for a breakout from TWTR, which is down 61.5% year-over-year. The stock's 50-day call/put volume ratio at the ISE, PHLX, and CBOE of 3.46 stands at an annual high, meaning call buying has outpaced put buying by a faster pace than at any other time in the past 12 months. However, analysts aren't as optimistic, with the majority rating Twitter Inc (NYSE:TWTR) a "hold" or worse. 

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