shares Explode, Explode(Explode, Explode) It fell more than 40% on Tuesday and reached its lowest level since March 2020, right after the Covid-19 pandemic hit the United States.
company Said in a regulatory filing That its bleak outlook was due to the fact that “the macroeconomic environment deteriorated more and faster than expected”.
News of Snap’s problems sent shares of many of its competitors down.
Facebook and Instagram owner ID pads(FB) decreased nearly 10% while Pinterest(pins) It fell more than 20%. YouTube and Google Parent the alphabet(The Google) slither 6% and Global X Social Media ETF(SOCL)That owns shares in all of these companies, down 8%.
The social setback hampered the general mood of the market. Technology Overwhelmed Nasdaq It was down 2.6% on Tuesday afternoon. The daw It fell nearly 150 points, or 0.4%. Standard & Poor’s 500 It fell more than 1.3%.
Investors in social media stocks are clearly concerned that advertisers may pull back from marketing spending due to a series of concerns.
The Russian invasion of Ukraine led to a sharp rise in oil and gas prices around the world. In addition to rising energy costs, inflationary pressures are putting a brake on corporate spending. The recent rise in Covid cases in China is another worrying sign for businesses and consumers.
Snapchat in particular has also been hurt by the increasing popularity of TikTok and other emerging social media services that are flocked to by younger users, such as discord And Amazon(AMZN)A owned video game streaming platform, Twitch.
Social media companies were wrestling with negative influence on advertising revenue resulting from privacy changes from apple(AAPL) For iPhone users and other devices running on the iOS platform.
The advertising landscape also worries analysts. “A broad recession in the advertising market appears increasingly likely,” Wells Fargo analyst Brian Fitzgerald said in a report released on Tuesday.