Pandemic Lockdowns Proving to Be a Windfall for Social Media Stocks As New Users Skyrocket

Financialnewsmedia.com News Commentary

PALM BEACH,  Fla., Aug. 12, 2020 /PRNewswire/ -- Despite the losses many companies and industries have experienced during the current global pandemic, there are winners out there and one of the best is the global digital landscape and the social networking apps market. The growth in social media use is partly due to multi-networking which is a response to the widening choice of platform. A social networking/messenger site is an online platform which people use to build social networks or social relationship with other people who share similar personal or career interests, activities, backgrounds or real-life connections. Social media users are comfortable maintaining a presence across several platforms; while the average internet user had about 6.2 social media accounts in 2015, the figure has risen to nearly 8 in 2020, according to a report from SmartInsights. It continued, discussing a report from Datareportal saying: "a special report by Datareportal looked at changes in social media usage during the COVID-19 lockdown period. Notably (it showed) a monumental increase in online and digital activities." Active companies in the industry making moves include:  Tongji Healthcare Group, Inc. (OTCPK: TONJ), Facebook, Inc. (NASDAQ: FB), Twitter, Inc. (NYSE: TWTR), Snap Inc. (NYSE: SNAP), JOYY Inc. (NASDAQ: YY).

The report continued with: "Some of the key takeaways from their Digital 2020 July Global Snapshot published on the 21st July 2020 are: "More than half of the world now uses social media; 4.57 billion people around the world now use the internet, of those users,  346 million new users have come online within the last 12 months; and 5.15 billion unique mobile users.  Analysis of regional use of social media shows the wide variation inactive social media penetration reaching 63% in Eastern Asia, 69% in North America, 68% in Southern America and 66% in Northern Europe falling to 56% in Western Asia, 40% in Northern Africa and 7% in Middle Africa. Between January - March 2020, digital consumers spent an average of 2 hours and 22 minutes per day on social networks and messaging apps according to Global Web Index."

Tongji Healthcare Group, Inc. (OTCPK: TONJ) BREAKING NEWS:  Tongji Healthcare Group, Inc. Signs Agreement to Acquire Premier Social Media Influencer Firm "The Clubhouse" with over 70M Followers   - Tongji Healthcare Group is excited to announce the signing of a Share Exchange Agreement to acquire West of Hudson Group Inc. ("WOHG"), the sole and complete owner of "The Clubhouse," a collection of content creation houses located in the scenic mansions of Southern California that houses some of the most prominent and widely followed social media influencers, together carrying an estimated base in excess of 70 million followers across all the Clubhouse influencers.  WOHG is currently owned by Amir Ben-Yohanan, Chief Executive Officer; Christian Young, President and Secretary; and Simon Yu, Chief Operations Officer. Closing of the acquisition is subject to customary conditions, including the pending completion of the target's financial audit process, which is currently expected to close in September 2020.

WOHG's Clubhouse is an established network of four social media content creation houses ("Clubhouse BH", "Clubhouse Next", "Clubhouse FTB", and "Not a Content House") that has already received organic media coverage from the New York Times, Business Insider and Forbes.  The breadth and scale of this reach represents unique intellectual property, allowing the Clubhouse to establish lucrative deals with prominent brands through its in-house Talent Agency, Doiyen, or create and promote its own consumer brands.

"The Clubhouse provides a picturesque living environment, complete with in-house photographers and videographers, so we can maximize the depth, breadth and scale our influencers can build across popular social media platforms while having fun and just being themselves," commented Mr. Ben-Yohanan. "Cultivating a large and committed following and then pursuing the popularization of in-house brands has demonstrated stunning recent success as a model. We would point to Kylie Jenner's Kylie Cosmetics, which was valued at nearly $1.2 billion when it sold a controlling stake to Coty, Inc. last November. That value was built by first cultivating a broad influencer following. When this acquisition closes, we will have that value to harness."

Management also points to a wealth of recent research affirming the growth thesis in the social media ad spend space, with Zenith recently predicting global social media ad spend to gain 20% in 2020 to reach an estimated $84 billion. According to Zenith's data, social media advertising will account for 13% of total global ad spend and rank as the third-largest advertising channel, behind TV and paid search.

Social media ad spending surpassed print media ad spend last year for the first time ever, according to Zenith. That trend is almost universally expected to continue and even accelerate over coming years.  Mr. Ben-Yohanan added, "We have immediate plans to expand The Clubhouse to additional locations, develop new influencers and create new intellectual property and in-house consumer brands. We look forward to discussing more related details with our shareholders soon."

Additional industry related developments from around the markets:

Facebook, Inc. (NASDAQ: FB) recently reported financial results for the quarter ended June 30, 2020. "We're glad to be able to provide small businesses the tools they need to grow and be successful online during these challenging times," said Mark Zuckerberg, Facebook founder and CEO. "And we're proud that people can rely on our services to stay connected when they can't always be together in person."

Our business has been impacted by the COVID-19 pandemic and, like all companies, we are facing a period of unprecedented uncertainty in our business outlook. We expect our business performance will be impacted by issues beyond our control, including the duration and efficacy of shelter-in-place orders, the effectiveness of economic stimuli around the world, and the fluctuations of currencies relative to the U.S. dollar.

Twitter, Inc. (NYSE: TWTR) recently announced financial results for its second quarter 2020.  "Our product work is paying off, with tremendous growth in audience and engagement. We grew mDAU to 186 million, a 34% year over year increase in Q2, the highest quarterly year-over-year growth rate we've delivered since we began reporting mDAU growth," said Jack Dorsey , Twitter's CEO. "I also want to address the security issue Twitter suffered last week. We moved quickly to address what happened, and have taken additional steps to improve resiliency against targeted social engineering attempts, implemented numerous safeguards to improve the security of our internal systems, and are working with law enforcement. We understand our responsibilities and are committed to earning the trust of all of our stakeholders with our every action, including how we address this security issue. We will continue to be transparent in sharing our learnings and remediations."

"Revenue was $683 million in Q2, down 19% year over year, reflecting moderate recovery in advertising demand relative to the last three weeks of March. Despite the pandemic, brands have found innovative ways to join the conversation on Twitter to connect with their customers," said Ned Segal , Twitter's CFO. "We have completed our ad server rebuild and are making progress accelerating our performance ads roadmap. With a larger audience and progress in ads, we are even better positioned to deliver for advertisers when the live events and product launches that bring many people and advertisers to Twitter return to our lives."

Snap Inc. (NYSE: SNAP) recently announced financial results for the quarter ended June 30, 2020.  Financial Highlights: Operating cash flow improved by $29 million to $(67) million in Q2 2020, compared to the prior year; Free Cash Flow improved by $21 million to $(82) million in Q2 2020, compared to the prior year; Common shares outstanding plus shares underlying stock-based awards totaled 1,616 million at June 30, 2020, compared to 1,553 million one year ago; Revenue increased 17% to $454 million in Q2 2020, compared to the prior year; Net loss was $(326) million in Q2 2020, compared to $(255) million in the prior year; and Adjusted EBITDA was $(96) million in Q2 2020, compared to $(79) million in the prior year.

"We continued to grow our community and business in a challenging and uncertain environment," said Evan Spiegel, CEO. "I am proud of our team for innovating on new experiences for our community and driving value for our partners, demonstrating the importance of our service in people's lives. We are grateful that the resilience of our business has allowed us to remain focused on our future growth and opportunity."

JOYY Inc. (NASDAQ: YY), a global video-based social media platform, recently announced that it plans to release its second quarter 2020 financial results after the U.S. market closes on Wednesday, August 12, 2020.  The Company's management will host an earnings conference call at 9:00 PM U.S. Eastern Time on Wednesday, August 12, 2020 (9:00 AM Beijing/Hong Kong Time on Thursday, August 13, 2020). 

Due to the global outbreak of the COVID-19, operator assisted conference calls are not available at the moment. All participants must use the link provided below to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in numbers, the Direct Event passcode, and a unique registrant ID by email.  PRE-REGISTER LINK:  http://apac.directeventreg.com/registration/event/1085396

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