Social media leaders Snap and Twitter shares drop after disappointing second-quarter earnings: What’s happening in the near-term for this space
Second Quarter Earnings Reports Snap, Inc. Explode, Explode And the Twitter, Inc. TWTR Serves as a stark reminder of the problems social media companies have faced in recent times.
Snap revenue misses: Quarterly results from Snapchat Parent Snap showed that the initial results were shy of estimates. The company blamed macroeconomic weakness on the softness.
Snap’s results are rapidly diverging from the industry, according to KeyBanc Capital Markets . analyst Justin Patterson He said in a note reviewing the results. To support his conclusion, he highlighted comments from ad agencies that things were going well in the first half of the year, as well as at the start of the third quarter. According to the analyst, Snap is facing competitive pressure from competitors such as TikTok and finding it difficult to win ad budgets.
Twitter blames Elon Musk for slowing advertising: Twitter reported an unexpected drop in second-quarter revenue. The social media platform attributed the weakness to macroeconomic uncertainty affecting ad spending and surrounding uncertainty Elon Musk A deal to take the company private.
Social media shares sympathize: After the quarterly results, Snap’s stock fell 39.08% to $39.84, bringing its loss to date close to 80%. The stock lost about $9 billion in market value. Twitter, which was down about 2% on the day, managed to pare its losses and closed 0.81% higher at $39.84.
Read Benzinga Technical Analysis of Snap Earnings Release After Meta Stock Publishing
In response to Snap’s plunge, other social media stocks have plummeted as well, wiping out billions from its market value.
- Profiler Platforms, Inc. dead It ended the trading down 7.59% at $169.27.
- Pinterest, Inc. pins It fell 13.51% to $18.11.
- Alphabet, Inc. The Google The Googlewhich owns YouTube, fell 5.63% to $107.91.
- dating app owner Match Group, Inc. MTCH It ended 3.31% lower at $72.21.
- Bumble Corporation BMBLanother dating app, is down 4.56% to $33.88.
Companies exposed to advertising spend have also moved to the downside.
Read across for other companies? pointed Apple company AAPL analyst Jane Monster He said Meta’s results aren’t likely to be as bad as Snap’s. However, the analyst cautioned investors to realize that there are risks.
Apple’s privacy changes still pose a risk to social media companies.
Take benzinga: If the macroeconomic fundamentals do not improve, there is a potential for advertising budgets to be cut further, affecting the performance of these companies. With inflation still rising and the threat of a massive interest rate hike, 2022 could be a lost year for most of these social media companies.