From Musk to Meta, social media is now a bad investment

Last week was a particularly grim one for investors in high-tech enterprises, as the bear market in the sector took a further vicious downward twist, writes Hamish McRae

For Elon Musk, Twitter is a vanity purchase (REUTERS)

Maybe if you are the richest person in the world it doesn’t matter, and Elon Musk wasn’t in it for the money. But his purchase of Twitter may well turn out to be a seriously bad financial investment, a weak player in a sector that has peaked and may well be heading into structural decline.

The Twitter story is so well known that it is hardly worth repeating. Just note the $44bn he paid for the company, that’s $54.20 a share, compared with $45.10 a share on its first trading day in 2013. Allow for inflation and it is worth less now than it was then. True, if you managed to grab shares at the offer price of $26 a share, you would have done all right, but overall this has been a dreadful investment.

Last week was a particularly grim one for investors in high-tech enterprises, as the bear market in the sector took a further vicious downward twist. The biggest casualty was Facebook, now called Meta Platforms, where shares are trading just under $100, almost exactly where they were at the end of October 2015. Back in October last year, when the company made its ill-fated name change, they were over $325. Veteran investors know that a company changing its name is a classic sell signal.