Social media stocks lost about $US165 billion in market value after Snap’s profit warning, adding to woes for the sector which is already reeling amid stalling user growth and rate-hike fears.tumbled as much as 40 per cent, their biggest intraday decline ever, erasing about $US15 billion in market value. Added to the value of declines for peers including Facebook-owner Meta, Google-owner Alphabet, Twitter and Pinterest, the group has seen $US165.6 billion wiped out.
“At this point, our sense is this is more macro and industry-driven versus Snap specific,” Piper Sandler analyst Tom Champion wrote in a note. The owner of the Snapchat app, which sends disappearing messages and adds special effects to videos, reported quarterly user growth in April that topped estimates. But with the company saying just a month later that it won’t meet prior forecasts for revenue and profit, analysts noted a rapid deterioration of the economic environment.The news spurred widespread selling across the advertising and ad-tech space. Among notable decliners, Trade Desk sank 18 per cent, fuboTV lost 7.
User growth is another a big focus for social media firms as they vie to attract new customers to target ads in an already saturated market. In February, Facebook-parent Meta posted the biggest one-day wipeout in market value for any US company ever after saying that user additions stalled.