Shares of Facebook and Instagram parent Meta Platforms surged Wednesday on word the company plans to capitalize on user discontent with microblogging service Twitter by launching a rival product called Threads. Meta stock jumped nearly 3%.
News of Meta's plans emerged over the July 4 holiday weekend. The company's Threads website late Wednesday quietly moved up the launch time to 7 p.m. ET Wednesday. For most of the day Wednesday, a countdown clock on the website ended at 10 a.m. ET on Thursday.
Service disruptions and changes at Twitter under new owner Elon Musk have created an opening for competitors. But so far those competitors — such as Bluesky, Mastodon and Truth Social — have yet to catch on in a major way.
Since Musk bought Twitter last October for $44 billion, he has instituted a number of controversial changes. Those changes included scrapping verified accounts in favor of paid subscriptions and reinstating the accounts of many previously banned users.
Over the weekend, Musk imposed severe Twitter rate limits, restricting how many tweets that users could view in a day.
Meta Stock Rises On Threads News
On the stock market today, Meta stock rose 2.9% to close at 294.37. Further, Meta stock is up nearly 145% year to date.
Meta has described Threads as a "text-based conversation" app, according to the Wall Street Journal. The social networking giant will launch Threads under the umbrella of its photo- and video-sharing service Instagram.
Meta is betting that Instagram users will help quickly populate Threads, the Journal said. Also, Meta could emerge as Twitter's biggest threat, Brian Wieser, an analyst with Madison and Wall, said in a blog post.
"Twitter's self-imploding antics of the Elon Musk era and the failure of upstarts to capitalize on the situation should mean there is an opportunity for someone to capture significant consumer engagement and advertiser budgets from Twitter," Wieser said. "But can Meta do it? I think it's very plausible."
Meanwhile, Meta stock is on IBD's Leaderboard as well as the IBD Tech Leaders list.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
