header banner
Default

As Twitter and Snap warn of dire ad spending, social media stocks plummet


Shares of social media firms fell sharply on Friday as Twitter Inc joined the Snapchat owner in signaling a cutback in digital ad spend as economic growth sputters.

Pinterest Inc plunged 7.5%, Facebook-owner Meta Platforms Inc dropped 4.6%, Google-owner Alphabet Inc, which also sells ads online, fell 2.1%.


Elevate Your Tech Prowess with High-Value Skill Courses

VIDEO: Snap CEO warns on earnings, social media stocks dive premarket
Yahoo Finance
Offering CollegeCourseWebsite
IIM LucknowIIML Executive Programme in FinTech, Banking & Applied Risk ManagementVisit
IIM KozhikodeIIMK Advanced Data Science For ManagersVisit
Indian School of BusinessISB Professional Certificate in Product ManagementVisit

At current prices Pinterest, Meta, Alphabet and Snap were collectively set to lose about $36 billion in market value.

Twitter also blamed its ongoing battle to close its $44-billion acquisition by Elon Musk for the surprise fall in quarterly revenue. The micro-blogging site's shares were marginally higher.

Advertisers have pared back spending amid rising interest rates and surging inflation as some of them struggle with labor shortages and supply chain disruptions, Snap Inc said on Thursday.

"If you want proof that companies are nervous about the economic outlook, just look at how media platforms and marketing agencies are bemoaning a tougher advertising market," Russ Mould, AJ Bell investment director, said.

Discover the stories of your interest

VIDEO: Snap’s shares slump on profit warning
Reuters
  • 88412482

  • 88412342

  • 88412088

  • 88412029

  • 88411860

  • 88411824

88591548

88591548

Investors are bracing for the slowest global revenue growth in the history of the social media sector as Apple Inc's privacy changes further cloud outlook.

Snap Inc's shares were down 34.6% and were the most heavily traded across U.S. exchanges, as the company said it was looking for new sources of revenue to grow.

The Snapchat owner's weak quarterly outlook confirm fears that ad spending is worsening, RBC Capital Markets said in a note.

"Unfortunately for Snap and the digital ad sector, we believe there are signs of further ad spending cuts."

Meta and Alphabet are slated to post quarterly results next week, while Pinterest is set to report second-quarter results on Aug. 1.

Stay on top of technology and startup news that matters. Subscribe to our daily newsletter for the latest and must-read tech news, delivered straight to your inbox.

Sources


Article information

Author: Alison Wheeler

Last Updated: 1702439882

Views: 1438

Rating: 4.4 / 5 (73 voted)

Reviews: 94% of readers found this page helpful

Author information

Name: Alison Wheeler

Birthday: 1990-05-20

Address: 24650 Gibson Terrace, New Victorland, TX 71058

Phone: +4741686484875762

Job: Web Designer

Hobby: Knitting, Camping, Animation, Rock Climbing, Cooking, Surfing, Writing

Introduction: My name is Alison Wheeler, I am a honest, treasured, irreplaceable, tenacious, dedicated, rich, steadfast person who loves writing and wants to share my knowledge and understanding with you.