- Shares of social media and some digital advertising companies fell on Tuesday after Snap issued a warning to investors that it would not meet its revenue and adjusted earnings targets for the current quarter.
- “Since we issued guidance on April 21, 2022, the macroeconomic environment has deteriorated more rapidly than expected,” Snap said in an SEC filing.
- Snap shares fell 30% in the pre-market, setting the company up for its worst day ever.
Snap shares tumbled 32% pre-market, setting the company up for its worst day ever and other social media and digital ads dragging the company’s shares down.
The decline comes after Snap issued a warning to investors on Monday that it would not meet its revenue and adjusted earnings targets for the current quarter.
“Since we issued guidance on April 21, 2022, the macroeconomic environment has deteriorated more rapidly than expected,” the company said in an SEC filing.
The filing also led its peers with a heavy reliance on pre-market advertising. Shares of Meta were down more than 7%, Roku is down more than 7% and Pinterest stock is down more than 14%. Google and Twitter each fell by 4% and 3%, respectively.
Snap’s warning is also affecting the ad tech industry. The Trade Desk is down 10%, Magnite is down more than 6% and PubMatic is down more than 2% in pre-market trading.
“We expect all online advertising platforms to feel some of the impact of a significant consumer pullback,” analysts at Morgan Stanley said in a note to investors Tuesday. “Advertising is cyclical.”
Inflation fears, interest rate concerns, supply chain issues and the war in Ukraine have forced some advertisers and brands to rethink advertising spending in the current quarter. Companies including Snap have been under pressure to slow hiring and cut costs in an effort to make up for losses.
Analysts at Evercore ISI said in Monday’s note, “We see no real reason not to take Snap’s negative pre-releases at face value. Digital advertising is cyclical, but like all advertising, and the macro headwinds can be very tough.” are.”
Credit: www.cnbc.com /