Snap (NYSE:SNAP) stock is again in focus on Tuesday, along with the rest of the social media stocks as the situation between Twitter (NYSE:TWTR) and Tesla’s (NASDAQ:TSLA) Elon Musk continues to evolve. On Monday, these stocks rocketed higher on news that Musk took a 9.2% stake in Twitter.
Yesterday shares of Twitter closed higher by 27.1%. Thanks to the recent news, the company had its best day of trading since its 2013 IPO. On Tuesday, an SEC filing revealed that Musk will join Twitter’s board of directors until his term ends in 2024. The filing stated that his ownership stake is capped at 14.9% as long as he is on the board. So how does all of this pertain to Snap?
The social media space has suffered significant losses in recent quarters. Growth stocks have been in a bear market and most would consider these stock growth names. Now that Musk is stepping into Twitter with a sizable stake, who’s to say Snap or Pinterest (NYSE:PINS) isn’t next?
Even without a big-name buyer, Snap stock has shown some relative strength among its peers.
Snap is down 29% over the past 12 months and more than 50% below its 52-week high. That’s despite shares being currently up about 60% from the 2022 lows. Despite this performance, Snap was one of the best-performing stocks in this group before the Twitter-Musk news hit on Monday.
Further, Snap stock is still easily the best performer of the group over the last three years. The stock boasts gains of 225% over that span, followed by Twitter and Facebook (NASDAQ:FB) at 53% and 29.5%, respectively. Absent this week’s gains though, Twitter sports a three-year return of just 15%.
Snap isn’t relying on a big-name investor, fund or company taking a stake to fuel its growth. Recently, the company announced that users can now share YouTube videos straight through the Snapchat camera. Further, some investors are looking at Snap as a potential metaverse play. The company’s augmented reality (AR) Glasses are being viewed as a potential platform for the up-and-coming industry.
Should Snap stock continue higher, look for its relative strength and growth to be the catalysts for a higher stock price.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.