#SocialStocks: Meta Fights Scraping, Twitter Interest Payments Coming Due

Articles From: The Fly
Website: The Fly

Oversight Board overturns Meta decisions on Instagram posts, and other notable stories from this week

Welcome to “#SocialStocks,” The Fly’s weekly recap of Wall Street’s reactions to social media stock news.

META OPPOSES SCRAPING SERVICE: 

Meta (META) said it is fighting back against a so-called “scraping-for-hire” service and filed a legal action against Voyager Labs in federal court in California. Voyager Labs is a scraping and surveillance service that improperly collected data from Facebook, Instagram and other websites. “We disabled Voyager’s accounts, filed this action to enforce our Terms and Policies and asked the Court to ban Voyager from Facebook and Instagram,” Meta said. “Voyager developed and used proprietary software to launch scraping campaigns against Facebook and Instagram, and websites such as Twitter, YouTube, LinkedIn and Telegram. Voyager designed its scraping software to use fake accounts to scrape data accessible to a user when logged into Facebook, including users profile information, posts, friends lists, photos and comments. Voyager used a diverse system of computers and networks in different countries to hide its activity, including when Meta subjected the fake accounts to verifications or checks. Voyager did not compromise Facebook, instead it used fake accounts to scrape publicly viewable information. Our lawsuit alleges that Voyager has violated our Terms of Service against fake accounts and unauthorized and automated scraping. We are seeking a permanent injunction against Voyager to protect people against scraping-for-hire services. Companies like Voyager are part of an industry that provides scraping services to anyone regardless of the users they target and for what purpose, including as a way to profile people for criminal behavior. This industry covertly collects information that people share with their community, family and friends, without oversight or accountability, and in a way that may implicate people’s civil rights.”

OVERSIGHT BOARD OVERRULES META: 

The Oversight Board has overturned Meta’s original decisions to remove two Instagram posts depicting transgender and non-binary people with bare chests. It also recommends that Meta change its Adult Nudity and Sexual Activity Community Standard so that it is governed by clear criteria that respect international human rights standards. In this decision, the Oversight Board considers two cases together for the first time. Two separate pieces of content were posted by the same Instagram account, one in 2021, the other in 2022. The account is maintained by a US-based couple who identify as transgender and non-binary. Both posts feature images of the couple bare-chested with the nipples covered. The image captions discuss transgender healthcare and say that one member of the couple will soon undergo top surgery (gender-affirming surgery to create a flatter chest), which the couple are fundraising to pay for. Following a series of alerts by Meta’s automated systems and reports from users, the posts were reviewed multiple times for potential violations of various Community Standards. Meta ultimately removed both posts for violating the Sexual Solicitation Community Standard, seemingly because they contain breasts and a link to a fundraising page. The users appealed to Meta and then to the Board. After the Board accepted the cases, Meta found it had removed the posts in error and restored them.

MUSK MUST DEAL WITH TWITTER INTEREST PAYMENTS SOON: 

The bill for Elon Musk’s purchase of Twitter is likely to be due soon, with three people saying the first installment of interest payments related to the $13B of debt Musk used to fund the takeover due as soon as the end of January, Tabby Kinder, Richard Waters, and Eric Platt of The Financial Times reports. The debt means the company has to pay $1.5B in annual interest payments. Since the takeover, Musk has tried to cut costs while creating new revenue streams, but the company’s finances remain dire. If Twitter does not make its first interest payment, Twitter would likely end up filing for bankruptcy. Musk could prevent this by settling the interest from Twitter’s cash reserve or selling more equity in the company to fund the payments.

TWITTER EXEC SAYS Q4 REVENUE FELL 35%: 

Twitter’s global sales and marketing chief Chris Riedy revealed at a staff meeting that the company’s fourth quarter revenue fell about 35% to $1.025B, according to The Information’s Erin Woo.

SNAP DOWNGRADED BY TWO ANALYST FIRMS: 

On January 17, JMP Securities analyst Andrew Boone downgraded Snap (SNAP) to Market Perform from Outperform without a price target. The analyst reduced estimates again citing declining U.S. time spent on Snap, which he believes is a direct consequence of increased competition from Reels and YouTube Shorts. Boone now prefers shares of Meta and Google (GOOG. GOOGL) over Snap, saying both have more mature short-form video products, which he expects to attract more user time over the next few years. Short-form video platforms are taking share of time from Snapchat, Boone told investors in a research note. The following day, January 18, OTR Global downgraded its view on Snap to Mixed from Positive.

Originally Posted January 19, 2023 – #SocialStocks: Meta fights scraping, Twitter interest payments coming due

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