An unexpected warning by Snap Inc. CEO Evan Spiegel could spill over into Internet and social media stocks at the end of Monday, ruining attempts to revive the market early in the day. bottom.
Spiegel spoke at JP Morgan’s technical conference after the market closed on Monday with a sharp rise, saying in a regulatory filing that second-quarter earnings were below previous estimates. .. At the meeting, Spiegel said the economy “deteriorated significantly faster” than snap snaps.
I was expecting it when I made a forecast at the financial results briefing last month. He added that Snapchat’s parents are looking for ways to slow down hiring that year and reduce costs.
Snap’s share has fallen by more than 30% in after-hours trading, and stocks of other internet and social media companies have fallen accordingly: Alphabet Inc. GOOGL,
3.6% slip, Facebook parent Meta Platforms Inc. FB,
7% fall, Pinterest Inc. PINS,
12% decrease, Twitter Inc. TWTR,
Last week, Elon Musk claimed that the deal to buy the company was pending, resulting in an additional 3.7% loss after riding a roller coaster.
Snap, like many other companies, was tackling supply chain issues, inflation, interest rate concerns, and the war in Ukraine, Spiegel said. “There’s a lot to deal with in today’s macro environment, but we’re still focused and investing in the really long term,” he said.
Snap’s comments may indicate that the Internet sector is getting worse, with overall Internet advertising slowing as the macro economy slows. Notable when it was influenced by Apple Inc.’s AAPL last year.
Privacy changes were felt on platforms that depended on advertising revenue, and it turned out that Snap and Facebook were hit hardest by those changes.
But this time, Snap could be the canary of a broader Internet sector coal mine that has been under great pressure during this year’s previous technology wreck. During the S & P 500 Index SPX,
Decreased by about 17%, and individual stocks fell sharply on a year-to-date basis. Alphabet decreased by almost 23%, Meta decreased by 40%, Pinterest decreased by about 38%, and Twitter temporarily increased at $ 44 in Mask. Billion takeover bids — down about 12% this year.
In recent weeks, a handful of tech giants have talked about cutting spending and even cutting some jobs in a changing environment. Netflix Inc. NFLX,
The first decline in subscriber growth from the early days was to dismiss 150 employees and reduce costs. Robinhood Markets Inc. HOOD,
We’re reducing employees by 9% and others like Uber Technologies Inc. UBER,
For now, we are reducing costs in other ways.
Snap’s comments could also affect the ongoing soap opera over the mask deal of buying Twitter for $ 54.20 per share. Musk claims that the number of Twitter spam / fake accounts is inaccurate at about 5% and believes it could be much higher, so he wants to put the transaction on hold. increase. Twitter argues that it expects the deal to close at the currently agreed price, but the market clearly doesn’t expect it to close at the current price. $ 37.86 per share). Twitter shareholders are expected to approve the transaction at the company’s annual shareholders meeting on Wednesday.
The market bounced on Monday from a short plunge into the bear territory last week, but its recovery may be short. High-tech stocks have risen sharply in the last two years of the pandemic, but are now one of the largest drugs in the market as a whole. It’s not yet clear what kind of bell the snap is, but it could be another indicator of even worse news in the future.