Meta May Launch a Web Version of Threads Soon as Users Plummet

Meta Platforms (NYSE: META) is considering launching a web version of its Threads app amid a steep fall in its active user base and engagement. While the app which is linked to a user’s Instagram profile started with a bang and hit 100 million users in just five days, the active user count has since fallen significantly.

Adam Mosseri, head of Instagram wrote on his Instagram profile last week that the company is working on a web version of its Threads platform. He said, “It’s a little bit buggy right now, you don’t want it just yet.” Mosseri added, “As soon as it is ready we will share it with everybody else.”

The Wall Street Journal reported that Meta might launch the web version as early as this week. A web version of the app was among the wish lists of Threads users.

Threads to launch a web version soon

During the Q2 earnings call, Meta CEO Mark Zuckerberg sounded quite bullish on Threads and said, “we have a lot of work to do to really make Threads reach its full potential. That’s not a foregone conclusion yet, even though I think we’re off to a great start. And I’m optimistic that, over time, this could be a fifth great app in the Family of Apps.”

He said that after the strong start to Threads, Meta is now focusing on retention and improving the basics of the app. Subsequently, the company would focus on increasing the community which would be followed by monetization.

Meta has been adding more features to the app but according to Sensor Tower, the app’s user base plummeted over 80% from the peak as the initial euphoria faded.

Twitter controversies

Threads is looking to capitalize on the widespread angst against Twitter (now X). Many users have been irked by the various policy changes that X has done since Elon Musk acquired the company.

In the most recent glitch, pictures posted on the platform prior to December 2014 were deleted. Musk said on X, “The sad truth is that there are no great “social networks” right now.”

He added, “We may fail, as so many have predicted, but we will try our best to make there be at least one.”

Last year, Musk acquired Twitter at $54.20 per share at a valuation of $44 billion. During Tesla’s Q3 2022 earnings call, he admitted that he overpaid for the company.

Twitter’s revenues have fallen

It’s been just around 10 months since Musk acquired Twitter and took it private. However, it has been chaos so far and Musk has made several changes at the company.

Soon after he took over, Musk fired many Twitter employees, including the top brass. The company’s then CEO Parag Agrawal was reportedly escorted out of the office. Many more Twitter employees quit after Musk asked them to commit to “hardcore” work.

The company’s headcount is now down by 80%. Despite these measures, Twitter is struggling with losses even as Musk admitted that the company’s revenues are down 50%.

Meta stock has soared in 2023

Meta stock has soared in 2023 amid better-than-expected financial performance. It reported revenues of $32 billion in Q2 2023 which was 11% higher than the corresponding quarter last year and ahead of the $31.12 billion that analysts expected. Notably, it was the first time since 2021 that Meta reported a double-digit rise in revenues. Its revenues fell YoY in the final three quarters of 2022 before rising in single digits in the first quarter of 2023.

The company’s Q3 guidance was also ahead of estimates and implies a YoY growth of 15% at the low end.

Meta reported an EPS of $2.98 which was ahead of the $2.91 that analysts were expecting and 21% higher than the corresponding quarter last year. Its CEO Mark Zuckerberg previously said that 2023 is the “year of efficiency” for the company and it has embarked on an aggressive cost-cut plan, and among others, it has slashed its workforce by a quarter – which is the highest among FAANG peers.

The company reported daily active users (DAUs) of 2.06 billion in the quarter which was ahead of the 2.04 billion that analysts expected. Its average revenue per user (ARPU) came in at $10.63 which was higher than the $10.22 that analysts expected.

Wall Street analysts are bullish on Meta stock

Wall Street analysts are also bullish on Meta stock, among others due to the Threads platform with Evercore ISI estimating that its revenues would rise to $8 billion by 2025.

After the company’s Q2 earnings release, Wall Street got even more bullish on the Mark Zuckerberg-led company.

Morgan Stanley analyst Brian Novak raised his target price from $350 to $375 and said, “META’s AI investments continue to drive higher engagement, advertiser return, platform monetization and EPS. And the product pipeline is flush with a September AI event catalyst.”

Goldman Sachs also raised its target price on Meta from $300 to $384 and said, “While there were some mixed narratives (both qualitative and quantitative) around opex/capex in 2023/2024, our view is that management’s ‘year of efficiency’ theme continues to drive a sustained mentality shift inside the company.”

Wells Fargo admitted that it was wrong about Meta and upgraded the stock from equal weight to overweight while raising the target price from $313 to $389.

JPMorgan maintained its overweight rating on Meta while raising the target price to $425 – which is among the highest on Wall Street.

In its note, JPMorgan analyst Doug Anmuth said, “Meta’s considerable AI investments over the past couple years are paying off as AI-generated content drives incremental engagement (7% higher on FB) and AI powers Advantage.”