Just when it looked safe to get involved with the Global X Social Media Index ETF (NasdaqGM: SOCL), earnings season happened. Suffice to say, this week’s batch of social media earnings have been unkind to SOCL, the lone dedicated social media ETF.
SOCL comes into Friday with a one-month gain of 4.2%, but that gain has been cut in half this week amid lackluster results from Twitter (NYSE: TWTR) and Yelp (NYSE: YELP). For example, SOCL fell 2.3% yesterday as Yelp plunged 23.2%. Prior to Twitter’s earnings drama earlier this week, SOCL had surged 17% over the past 90 days. [Twitter Earnings Will Affect These ETFs]
Twitter and Yelp combine for less than 6% of SOCL’s weight, so imagine the impact, likely adverse, LinkedIn (NYSE: LNKD) is going to have on the ETF today. Shares of LinkedIn, SOCL’s second-largest holding with a weight of 11.7%, plunged nearly 21% during Thursday’s after-hours session after the company forecast second-quarter EPS of 28 cents on revenue of $670 million to $675 million. Analysts were expecting 74 cents per share on revenue of $719 million.
If LinkedIn’s after-hours loss stays the same or worsens today, it will join Twitter and Yelp in shedding more than 20% of its market value post-earnings.
Late last month, Google (NasdaqGM: GOOG) disclosed a lower-than-expected earnings for the first quarter. The slightly lowered earnings results were largely attributed to currency risks, so revenue growth was still a healthy 17% year-over-year, excluding the impact of foreign exchange, reports Everett Rosenfeld for CNBC. Google is SOCL’s seventh-largest holding at a weight of 4.5%. [Social Media ETF Leads Again]