- Social media stocks saw a spiral on Tuesday after Snap had its biggest fall to date, closing at US$12.70 per share
- The fall followed an announcement made by the Snapchat parent indicating tough times ahead with Snap expecting to cut its revenue and profit forecasts
- Snap is expecting to miss quarterly revenue and profit targets it set last month and will slow hiring and lower spending
- The fall also saw social media peers Meta falling 7.6 per cent, Google parent Alphabet dropping five per cent and Twitter falling 5.6 per cent
It was a social media downfall on Tuesday, after Snap closed 43 per cent in the red, its biggest drop to date, also causing its social media peers to fall as well.
The fall followed an announcement made by the Snapchat parent indicating tough times ahead with Snap expecting to cut its revenue and profit forecasts.
Snap is expecting to miss quarterly revenue and profit targets it set last month and will slow hiring and lower spending.
The company was on track to lose US$15 billion in market capitalisation, while shares in other major online advertisers and social-media firms were set to lose a total of $200 billion in value.
The social media giant fell to US$12.70 at close in New York on Tuesday, this is a drop from its initial public offering of US$17 per share in 2017.
The fall spread across the social media industry, with Meta falling 7.6 per cent, Google parent Alphabet dropping five per cent and Twitter falling 5.6 per cent.
Fears around inflation, interest rates, supply chain issues and the war in Ukraine has forced some advertisers and brands to rethink ad spend in the current quarter.
“We continue to face rising inflation and interest rates, supply chain shortages and labour disruptions, platform policy changes, the impact of the war in Ukraine, and more,” CEO Evan Spiegel said in a note to staff on Monday.
Snap will add 500 roles before the end of the year, in addition to the 900 jobs already offered this year. Last year there were about 1500 new staff added.