On Thursday, the combined stock market value of Facebook-owned Meta Platforms, Alphabet-owned Google, and other firms that sell online advertisements fell by approximately $80 billion after Snap reported weak quarterly results and warned of an uncertain outlook.
The Snapchat owner failed second-quarter sales forecasts and cautioned that "forward-looking visibility remains exceedingly tough" due to a weaker economy, more competition from TikTok, and recent privacy changes on iPhones.
Its stock dropped 26 per cent, bringing Snap's loss in 2022 to more than 70 per cent.
With Wall Street already concerned about the possibility of a recession, Snap's disclosure prompted a selloff in rival digital ad vendors. In prolonged trading, Meta plummeted 5 per cent, Alphabet declined 3 per cent, and Pinterest fell 7 per cent.
Twitter's stock dropped less, losing slightly under 2 per cent.
Alphabet's share price decline reduced its market capitalization by more than $40 billion, while Meta's loss reduced its market capitalisation by roughly $25 billion. Snap's share price decline wiped off $7 billion of its value.
Snap's dismal earnings report weighed on other growth firms, with Spotify Technology, Shopify, and Roblox all down over 3 per cent after hours.
With Twitter suing Elon Musk to compel him to fulfil his April promise to buy the firm for $44 billion, many investors see Twitter's stock as a bet on the outcome of that future legal battle, rather than a reflection of the company's existing fundamentals.
Twitter is scheduled to release its quarterly results early on Friday, but the microblogging network has cancelled its usual analyst call, citing Musk's "pending acquisition."
Snap reported that its daily active users increased 18 per cent year over year to 347 million, exceeding experts' estimates.
However, such user increase comes as social media businesses' customers face 40-year high inflation and prepare for a probable economic slump, an environment in which brands spend less on advertising and scrutinise how they spend their advertising expenditures.
Alphabet releases its second-quarter results on July 26, Meta on July 27, and Pinterest on August 1.
(Source:www.usnews.com)
The Snapchat owner failed second-quarter sales forecasts and cautioned that "forward-looking visibility remains exceedingly tough" due to a weaker economy, more competition from TikTok, and recent privacy changes on iPhones.
Its stock dropped 26 per cent, bringing Snap's loss in 2022 to more than 70 per cent.
With Wall Street already concerned about the possibility of a recession, Snap's disclosure prompted a selloff in rival digital ad vendors. In prolonged trading, Meta plummeted 5 per cent, Alphabet declined 3 per cent, and Pinterest fell 7 per cent.
Twitter's stock dropped less, losing slightly under 2 per cent.
Alphabet's share price decline reduced its market capitalization by more than $40 billion, while Meta's loss reduced its market capitalisation by roughly $25 billion. Snap's share price decline wiped off $7 billion of its value.
Snap's dismal earnings report weighed on other growth firms, with Spotify Technology, Shopify, and Roblox all down over 3 per cent after hours.
With Twitter suing Elon Musk to compel him to fulfil his April promise to buy the firm for $44 billion, many investors see Twitter's stock as a bet on the outcome of that future legal battle, rather than a reflection of the company's existing fundamentals.
Twitter is scheduled to release its quarterly results early on Friday, but the microblogging network has cancelled its usual analyst call, citing Musk's "pending acquisition."
Snap reported that its daily active users increased 18 per cent year over year to 347 million, exceeding experts' estimates.
However, such user increase comes as social media businesses' customers face 40-year high inflation and prepare for a probable economic slump, an environment in which brands spend less on advertising and scrutinise how they spend their advertising expenditures.
Alphabet releases its second-quarter results on July 26, Meta on July 27, and Pinterest on August 1.
(Source:www.usnews.com)
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