Fall from grace… In the time it took you to lose your Snapstreak, Snap lost $15B in market cap. Shares plummeted 43% yesterday — the worst day ever for the Snapchat parent. Driving the plunge: Snap warned investors that it expects growth to slow as macro conditions continue to “deteriorate” (CEO Evan Spiegel mentioned inflation and war… and even the supply chain).
Snap’s ghost casts a long shadow… Snap’s ominous update halted the tech industry’s fragile rebound attempt: social-media stocks alone lost about $165B in market value after the warning, as the Nasdaq fell 2%. But those that rely on digital ads got hit hardest:
Advertisers are tightening their belts… just like everyone else. Snap’s ad business is relatively modest: Meta made 30X more $$ last year. But Snap’s surprise statement caused concern, partly because its ad biz has outperformed its larger rivals’ by adapting more quickly to Apple’s privacy updates and sustaining strong user growth. So if Snap’s struggling, other companies highly dependent on digital advertising might be on track to do worse. Cue: Meta’s market cap shed $53B yesterday — more than twice Snap’s entire valuation.