The social networking market is a large space full of opportunities that companies can explore and take advantage of. According to previous reports, the value of this market amounts to as much as $9.0 billion and it is expected to grow as more and more people around the world get access to the Internet and can enjoy lower charges for data transfers. Among many companies that populate the modern social networking space, three stand out as leaders in terms of user growth and respectively, profitability. These companies are Facebook Inc (NASDAQ:FB), LinkedIn Corp (NYSE:LNKD), and Twitter Inc (NYSE:TWTR). The most recent round of 13F filings showed an interesting change of trends. While Facebook kept itss position as the most popular stock among hedge funds tracked by Insider Monkey, Twitter and LinkedIn traded places, as the former saw a significant decline in bullish sentiment from investors.
Let’s take each stock separately. As it has been already mentioned Facebook Inc (NASDAQ:FB) is the most popular social networking stock as 118 funds among those that we track reported holding $7.90 billion worth of the company’s shares, which also makes the company one of the most popular stocks among hedge funds that we track. During the fourth quarter of 2014, the number of funds went up from 104, but the amount of capital held by the funds that we track actually declined from $8.92 billion in the previous quarter. Among the funds that we track, the largest shareholder of Facebook Inc (NASDAQ:FB) was Stephen Mandel’s Lone Pine Capital, which owned 13.50 million shares, valued at $1.05 billion. Additionally, among other investors betting on the stock are billionaires Ken Griffin, David Shaw, and Israel Englander.
Recently, Facebook launched the internet.org project in India, aimed towards offering free internet access for the lowest social classes, who can’t afford it otherwise. With the launch of this project, Facebook Inc (NASDAQ:FB) will be able to increase its userbase growth rate. Additionally, Facebook already enjoys a solid growth rate among mobile users. In its last financial report Facebook said it had around 1.39 billion monthly active users in 2014, up by 13% on the year and 1.19 million mobile monthly active users, an annual growth of 26%. Moreover, in 2014, the company’s revenue surged by 58% to $12.47 billion and diluted earning per share (EPS) grew to $1.10 from $0.60.
LinkedIn Corp (NYSE:LNKD) was next in line with 48 funds reporting ownership of $3.08 billion worth of the company’s stock, versus 45 funds with $2.75 billion worth of stock in the previous quarter. LinkedIn Corp (NYSE:LNKD) also posted strong fourth-quarter financial results with revenue advancing by 44% on the year to $643 million and earnings per diluted share jumping to $0.61 for the fourth quarter of 2014, from $0.39 a year earlier. Additionally EPS came above the estimates of $0.53.
Therefore investors have anticipated strong growth from LinkedIn Corp (NYSE:LNKD), which explains the growth of the stock’s popularity among the funds that we track. Philippe Laffont’s Coatue Management with 3.41 million shares of the company was the largest shareholder among funds that we track, followed by Lansdowne Partners, Matrix Capital Management, and Criterion Capital, among others.
However, the story changes when we come to Twitter Inc (NYSE:TWTR). Among all three stocks, Twitter is the youngest public company, as it went public in November 2013. Additionally, Twitter has not reported a profit yet, although its revenue has been growing nicely and net loss has been shrinking. For the fourth quarter of 2014, the company posted revenue of $479 million, up from $243 million a year earlier and negative EPS shrunk to $0.20 from $3.13 for the same period of the previous year. The company had a 1.4% quarterly user growth, which is the smallest rate on record for the company, and led to a total of 288 million users at the end of 2014.
Nevertheless, investors have been withdrawing capital out of the stock as our data shows. At the end of 2014, 42 funds reported holding long positions in the company with an aggregate value of $1.01 billion, which represents a significant decline from 59 funds with $2.03 billion worth of stock at the end of September. However, billionaire Ken Griffin was among the investors who raised their stakes in Twitter Inc (NYSE:TWTR) during the fourth quarter, with his fund Citadel Advisors reporting ownership of 2.73 million shares, up by nearly 900% over the quarter. On the other hand, Steven Cohen cut his stake in the company by 81% to 463,800 shares.
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