The Clap
Social media stocks tumbled after Snapchat’s CEO’s warning of a macro environment that’s noticeably worsened since Snapchat’s disappointing earnings last month.
You should know...
Snapchat’s CEO warned late Monday that the company is set to miss its own revenue & earnings for Q2-2022. Snapchat plummeted 43% in Tuesday’s trading, its worst one-day drop ever.
A spillover effect
Social media stocks felt the hit, as Meta dropped more than 7%, Twitter fell by more than 5%, & Pinterest sank more than 23%. The spillover effect didn’t stop there. Advertising stocks took an even bigger hit, with Trade Desk, fuboTV, Magnite, LiveRamp, & Roku all falling between 7%-19%.
Why this matters
Investors are worried that Snapchat’s situation could in fact be macroeconomic & industry-driven, rather than just Snapchat-specific. If that’s the case, then “platforms more exposed to brand advertising—like Twitter, Google’s YouTube, & Pinterest are likely experiencing a greater impact overall,” said one analyst at Citigroup.
