Warnings about the perils of social media are growing louder. Might this affect stocks such as Meta?
In Ireland, Minister for Education Norma Foley is proposing social media companies display tobacco-style warnings on their apps. Ireland’s intentions won’t cause global investors sleepless nights, but one might have expected a reaction to US surgeon general Dr Vivek Murthy’s recent New York Times opinion piece. He urges a tobacco-style warning that social media usage is “associated with significant mental health harms for adolescents” and restrictions on features such as push notifications, autoplay videos and infinite scroll that “prey on developing brains and contribute to excessive use”.
High-profile social psychologist Dr Jonathan Haidt has been calling for such measures for some time now, warning in his bestselling book The Anxious Generation that social media is driving the perceived crisis in adolescent mental health. Others see this as a moral panic and argue the science is far from settled.
Either way, investors don’t appear bothered. Meta shares dipped following Dr Murty’s op-ed, but ended the day slightly higher, Snap shares advanced, while Reddit dipped slightly and the Global X Social Media ETF ended the day flat.
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It’s worth remembering that five months ago, Meta’s Mark Zuckerberg and executives from TikTok, Snap, X and Discord were grilled in Congress in a hearing titled Big Tech and the Online Child Sexual Exploitation Crisis. It was an emotional affair, with Zuckerberg apologising to grieving parents holding photos of children who died following online abuse.
It looked bad but Meta shares have since advanced 25 per cent. Clearly, unfazed investors aren’t losing sleep over any new social media regulations.
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