It’s just been one day since Meta Platforms (NASDAQ:META) launched its new social media app, and Elon Musk’s Twitter and Mark Zuckerberg’s Threads are already engaged in a toxic battle. Twitter reportedly sent a letter to Meta Platforms CEO Mark Zuckerberg on Wednesday, threatening to sue the latter for “systemic, wilful and unlawful misappropriation of Twitter’s trade secrets and other intellectual property.” The letter alleges that Meta hired several ex-employees from Twitter’s engineering team to learn the trade secrets and functioning of the Twitter app and leverage the creation of its own similar version of the app, called Threads.
Replying to the accusation, Meta communications director Andy Stone posted on Threads, “No one on the Threads engineering team is a former Twitter employee — that’s just not a thing.” Musk took to Twitter to state, “Competition is fine, cheating is not.”
Threads Short Timeline
Since its launch on July 5 and in less than 24 hours, Meta’s Threads has already attracted over 30 million users, Zuckerberg said. He also mentioned that a lot of work needs to be done as users experienced glitches while using Threads. The app does not support advertising currently but threatens to lure the dozens of advertisers that have left Twitter owing to its lax moderation policies. The advantage the Threads app has is that Instagram users can port their login profiles to Threads as well as bring their followers from Insta to Threads.
On Threads, users can post texts up to 500 words long and videos of up to 5 minutes, as well as share photos and links. Threads can be downloaded via Android and iOS devices across 100 countries, except for the European Union, thanks to its stringent policies. While Musk recently imposed limits on the number of posts a user can view per day on Twitter, Threads currently has no such restrictions for verified or non-verified accounts.
Coming back to Musk’s complaint about the copycat app, Twitter has demanded that Meta take immediate action to stop using any of Twitter’s trade secrets, or Twitter will be forced to take “both civil remedies and injunctive relief.” While the two masterminds are set for a face-off in a cage fight that could be very interesting, it will be worth watching who has the last laugh in the courtroom battle.
Is META a Buy or Sell?
Following Meta’s Threads launch, CFRA analyst Angelo Zino lifted the price target on META to $350 (19.9% upside) from $300 while maintaining a Buy rating. Although the analyst does not forecast any revenue from Threads for the next two years, in the long run, the company will be able to leverage this potential with its over 2 billion monthly active users (MAUs) on Instagram. Plus, the timing of the launch is perfect, as per Zino, since several Twitter users are seeking better alternatives.
Wall Street is indeed optimistic about Meta Platforms stock. On TipRanks, META commands a Strong Buy consensus rating based on 36 Buys and four Hold ratings. The average Meta Platforms price target of $302.37 implies 3.6% upside potential from current levels. Meanwhile, META stock has gained 69.6% so far this year.
