Home NewsStock Market News Snap, Twitter crash, social media stocks wipe about $42 billion in market value | Anue Huge – US Stock

Snap, Twitter crash, social media stocks wipe about $42 billion in market value | Anue Huge – US Stock

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Snap, Twitter crash, social media stocks wipe about $42 billion in market value | Anue Huge – US Stock


Social media companies including Alphabet, Facebook parent company Meta, and Pinterest on Friday (22nd) suffered a comprehensive drop in stock prices following the dismal financial reports released by Snap and Twitter, and warning that advertisers had reduced spending due to the gloomy economic outlook. A total of about $42 billion in market capitalization was lost.

Before the deadline, social media stocks were bloody intraday, with Alphabet (GOOGL-US) down 5.71%, Meta (META-US) down 7.5%, and Twitter (TWTR-US) down 0.72%. Among them, Pinterest (PINS-US) fell 5.71%. US) tumbled 14.26% and Snap (SNAP-US) tumbled 38.96%. At current stock prices, Pinterest, Meta, Twitter, Alphabet and Snap lost a combined roughly $42 billion in market value.

Twitter’s financial report released before the market on Friday was not as good as expected. Revenue in the second quarter was reported at $1.177 billion, down 1% year-on-year, lower than the market’s forecast of $1.32 billion, compared with $1.19 billion in the same period last year; net loss was reported at 270 million US dollars, net profit of 65.65 million US dollars in the same period last year, adjusted loss per share of 0.08 US dollars.

Twitter said in its earnings report that the ad industry faced headwinds in a macro environment and uncertainty brought about by Musk’s acquisition were all factors that led to the disappointing performance. However, Twitter is still emphasizing in the financial report that Musk’s termination of the acquisition is invalid and wrong, and the merger agreement is still valid.

In addition, Snap’s post-market earnings report yesterday was dismal and was downgraded by at least 9 Wall Street investment banks. Advertisers cut spending amid rising interest rates and soaring inflation, the company noted, as some advertisers face labor shortages and supply chain disruptions.

On the other hand, Apple’s privacy concerns have further changed the outlook for the social media industry, as investors prepare for the slowest revenue growth in the social media industry’s history.

Analysts and Expert Views

Russ Mould, investment director at AJ Bell, said: “If you want to prove that companies are nervous about the economic outlook, just look at how media platforms and marketing agencies are complaining that the advertising market is getting harder.”

RBC Capital Markets said in the report that there are signs of further cuts in ad spending, which is bad news for Snap and the digital advertising industry.

Analysts at BofA Global Research said: “While ad revenue may be cut further, we believe that Alphabet’s revenue is likely to be relatively stable given the breadth of its advertisers, with more spending than most Peers are flexible.”

Investors’ focus is now turning to Meta and Alphabet, which will report next week, but some analysts are pessimistic about next week’s earnings as the two companies’ shares tumbled.

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