New Florida Law To Ban Social Media For Kids Under 14, Require ID Checks On All Ages—What's At Stake For Meta, Snap And Tech ETFs
Portfolio Pulse from Natan Ponieman
Florida's new law bans social media use for children under 14 and requires ID checks for all users, impacting companies like Meta (META) and Snap (SNAP), and tech ETFs such as SOCL, XLC, FENY, and LTL. The law, effective Jan. 1, 2025, aims to combat addiction and mental health issues among teens. Critics argue it infringes on First Amendment rights and necessitates invasive data collection. NetChoice, representing Big Tech, is expected to challenge the law.
March 25, 2024 | 8:01 pm
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NEGATIVE IMPACT
Fidelity MSCI Communication Services Index ETF (FENY) may be indirectly affected by Florida's new social media law, impacting its social media and tech holdings.
Although FENY is not exclusively focused on social media, its holdings in the tech and communication sectors could be indirectly affected by the new Florida law, potentially impacting its performance.
CONFIDENCE 65
IMPORTANCE 50
RELEVANCE 50
NEGATIVE IMPACT
ProShares Ultra Communication Services (LTL) could face challenges due to Florida's new social media law, affecting its leveraged exposure to the sector.
LTL, offering leveraged exposure to the communication services sector, may experience volatility and potential downturns as its holdings, including social media companies, navigate the challenges posed by the new Florida law.
CONFIDENCE 60
IMPORTANCE 45
RELEVANCE 50
NEGATIVE IMPACT
Meta, owning Instagram and Facebook, faces challenges with Florida's new social media law banning use for kids under 14 and requiring ID checks.
Meta's platforms, known for engaging younger audiences, could see a decrease in user base and engagement in Florida, potentially affecting ad revenues and stock price.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
NEGATIVE IMPACT
Snap Inc could be negatively impacted by Florida's new law requiring social media age verification, affecting its user base and engagement.
Given Snap's popularity among teens, the law's restrictions could lead to a significant reduction in its active user count and engagement in Florida, potentially harming its revenue and stock performance.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 85
NEGATIVE IMPACT
Global X Social Media ETF (SOCL) may face negative impacts due to Florida's new social media law affecting major holdings like Meta and Snap.
As a pure-play social media ETF, SOCL's performance is closely tied to the fortunes of its major holdings, including Meta and Snap. The new law could negatively affect these companies' stock prices, thereby impacting SOCL.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
NEGATIVE IMPACT
Communication Services Select Sector SPDR Fund (XLC) could see a downturn due to the new Florida law impacting key holdings in the social media sector.
XLC, with significant exposure to the communication services sector, including social media companies, may experience negative impacts on its performance due to potential challenges faced by its holdings under the new Florida law.
CONFIDENCE 70
IMPORTANCE 55
RELEVANCE 65