Evan Spiegal and co have defo snapped. Snap (SNAP) lost more than a third of its value on Tuesday after the social media group said in an unscheduled earnings warning that it would be stung by worsening macroeconomic conditions.
“Since we issued guidance on 21 April 2022, the macroeconomic environment has deteriorated further and faster than anticipated,” the company said in an SEC filing published on Monday evening. Snap said it now expected second-quarter revenue and earnings below its guidance range, and told staff it would slow the hiring of new recruits.
The company’s profit warning brought its shares down 40% after markets opened, to $13.41, well below the $17 level it opened its IPO in 2017. In percentage terms, the fall marked its largest single-day drop ever, with the bad news spilling over to the wider industry: Google’s owner Alphabet (GOOGL) fell 6%, Facebook (FB) 9%, Pinterest (PINS) more than 20% and Twitter (TWTR) 4%. Overall Snap’s warning has seen social media stocks lose value by up to $100 billion.
Why it matters
Concerns about a global economic slowdown have seen advertisers curb spending, which has knocked the valuations of tech companies that rely on marketing spending for the bulk of their revenues.
