Facebook owner Meta Platforms, owner of Google Alphabet and other companies that sell online ads lost about $ 80 billion in combined market capitalization Thursday after Snap posted poor quarterly results and warned of uncertain prospects.
Plagued by a weakening economy, increased competition from TikTok, and recent iPhone privacy changes, the owner of Snapchat missed its second-quarter revenue targets and warned that "forward-looking visibility remains incredibly challenging."
Shares plunged 26%, taking Snap's loss to over 70% in 2022.
With Wall Street already worried about a potential recession, Snap's report also led to a sell-off among rival internet ad sellers. Meta fell 5% in trade expansion, while Alphabet fell 3% and Pinterest tumbled 7%.
Shares of Twitter fell less, losing just under 2%. The decline in Alphabet's stock reduced its market cap by more than $ 40 billion, and Meta's loss reduced its market cap by around $ 25 billion. The drop in Snap's stock evaporated $ 7 billion of its value.
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Snap's poor ratio hit other growing stocks as well, with Spotify Technology, Shopify, and Roblox each down roughly 3% after hours.
With Twitter suing Elon Musk to force the billionaire to fulfill his April promise to buy Twitter for $ 44 billion, many investors see Twitter's stock as a bet on the outcome of that impending legal battle, rather than a reflection of the current foundations of the company.
Twitter will report its quarterly results early Friday, but the microblogging platform canceled its traditional conversation with analysts, pointing to Musk's "pending acquisition". In its report, Snap said its daily active users grew 18% year-over-year to 347 million, exceeding analysts' expectations.
But that user growth comes as social media company customers experience inflation at its highest point in 40 years and prepare for a potential economic downturn - an environment where brands spend less on advertising and exercise more control. on their advertising expenses.
Alphabet publishes second quarter results on July 26, Meta reports results on July 27 and Pinterest on August 1.