Shares of Twitter (NYSE: TWTR) tumbled more than 10% during Monday’s after-hours session after the company reported slack third-quarter user growth.
Twitter reported a third-quarter loss of $175 million, or 29 cents per share, compared with a loss of $64.6 million, or 48 cents per share, a year earlier. Revenue more than doubled to $361 million, but that was not enough to excite investors and Twitter’s disappointing user growth has set the Global X Social Media Index ETF (NasdaqGM: SOCL) off on a potentially rocky start to a big week of earnings updates from the ETF’s holdings.
The $124 million SOCL fell 1.4% Monday before Twitter’s after-hours update. That slide could be ameliorated or worsen in the days ahead as a large percentage of the ETF delivers earnings reports. For its part, Twitter is SOCL’s fourth-largest holding at a weight of 5.2% as of Oct. 24, according to Global X data.
Facebook (NasdaqGS: FB) delivers earnings after the close today and LinkedIn (NYSE: LNKD) follows on Thursday. Those are SOCL’s two largest holdings at combined 24.8% of the ETF’s weight. Groupon (NasdaqGS: GRPN), 3.9% of SOCL’s weight, also steps into the earnings confessional on Thursday. [Social Media ETF Waits on Big Earnings Updates]
The four stocks mentioned here combine for a third of SOCL’s weight, confirming that this indeed a big earnings week for the ETF. SOCL has to contend with these vital earnings updates just as it is struggling from a technical perspective.