SocialStocks: Snap May Be Small Enough To Be Acquired

Welcome to "#SocialStocks," The Fly's weekly recap of Wall Street's reactions to social media stock news.

RISKS ALREADY PRICED IN FACEBOOK SHARES:
On October 17, Baird analyst Colin Sebastian said he believes Facebook's (FB) shares have embedded some downside risk to consensus estimates with out-year Street margin expectations likely to compress further. Sebastian maintained his Outperform rating and $195 price target on Facebook shares. Also on October 17, the Wall Street Journal reported that several public funds with holdings in Facebook are backing a shareholder proposal to push out Chief Executive Mark Zuckerberg as chairman of the social network's board.

GOOGLE TO CONTINUE POSITIVE AD MOMENTUM:
Despite the loss of it's social media offering Google+, Google parent Alphabet (GOOG, GOOGL) is expected to continue being the king of digital ads, according to Wedbush analyst Michael Pachter, who initiated coverage on the search giant with an Outperform and has a $1,350 price target.

YOUTUBE GOES DOWN:
On October 16, Alphabet's video service, YouTube, suffered an outage for around an hour and a half. YouTube tweeted the following announcements regarding the outage: "Thanks for your reports about YouTube, YouTube TV and YouTube Music access issues. We're working on resolving this and will let you know once fixed. We apologize for any inconvenience this may cause and will keep you updated." Later that evening Team YouTube followed up with "We're back! Thanks for all of your patience. If you continue to experience issues, please let us know."

TWITTER SUSPENDS BOT ACCOUNTS IN KHASHOGGI CASE:
NBC News reported that Twitter (TWTR) suspended hundreds of bot accounts that were tweeting in support of Saudi Arabia and Crown Prince Mohammed bin Salman in light of Jamal Khashoggi's disappearance.

SNAP NOW SMALL ENOUGH TO BE ACQUIRED:
Loop Capital analyst Alan Gould started Snap (SNAP) with a Hold rating and $7 price target. The company's revenue and user growth have decelerated due to competition, a "controversial" redesign and issues with the Android version of its app, Gould tells investors in a research note. He believes that even if management can revise the app, competition from Instagram may make it difficult for Snap to reaccelerate its growth. However, the analyst adds that with an enterprise value down to $9B, Snap is now small enough to be acquired "if the controlling shareholders are willing sellers and if regulators allow such a deal."

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