Social media stocks slip amid Musk, Snap news

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Shares of social media companies are tumbling before the market open on Friday after a slew of news in the sector that concerned investors, including a report that Elon Musk may cut almost 75% of Twitter’s workforce. twitter elonmusk kprc2 snapchat

Wedbush's Dan Ives said in a client note that Twitter Inc. is due for some job cuts, but that the reported figure may not be the best approach.

“Musk cannot cut his way to growth with Twitter and a number in the 75% zip code would be way too aggressive in our opinion out of the gates," he wrote.to work out details of the proposed $44 billion deal. Otherwise, there will be a trial in November.Elsewhere in the sector, Snap Inc.'s stock slid more than 28% after the company behind Snapchat gave a lackluster forecast for the fourth quarter and itsSnap reported third-quarter revenue of $1.13 billion, below the $1.

While the Santa Monica, California-based company said in a letter to investors that it wasn't giving a formal fourth-quarter outlook, it did say that it's highly likely that year-over-year revenue growth will slow during the period. Snap said its internal forecasts are for year-over-year revenue growth to be about flat.

A JPMorgan analyst note said that Snap is experiencing weaker demand due to macro pressures, platform policy changes and competition. “We appreciate management’s efforts to control what they can—cutting costs & doubling down on more resilient performance-based ads—but trends remain choppy, and the macro backdrop is likely even tougher into 2023," the note said.

 

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