Source: International Business Times
This week, Snap Inc went on to post poor second quarter results of this year, warning about a rather dark upcoming quarter. Following this, companies such as Google parent Alphabet Inc, along Facebook parent Meta, etc. which sell advertisement faced losses of around $80 billion in combined stock market value on July 21.
The parent company of Snapchat failed to meet its goals in revenues of the second quarter of 2022. This was as it faced a staggering economy, elevated competition from TikTok, and new privacy updates on Apple’s iPhones. As it was unable to meet its ambitions, Snap placed the warning how the ‘forward-looking visibility’ continued to be extremely ‘challenging.’
The report from the Snapchat owner gave rise to a selloff in opposition internet advertisement sellers. For a while now, Wall Street has expressed concerns over a possibly incoming recession. Similarly, Meta went down by 5% in extended trade, at the same time, Alphabet plummeted 3%, with Pinterest dropping by 7%. Comparatively, Twitter witnessed a lesser fall, tumbling just below 2%.
The fall in the shares of Google owner resulted in cutting of market capitalisation by more than $40 billion. Similarly, Meta faced a market capitalisation reduction of nearly $25 billion. The loss Snap witnessed in its stock led to the evaporation of its value by about $7 billion.
Further results of the report from Snap:
The report from the Snapchat owner additionally had an impact on stocks of various businesses. This includes Roblox, Spotify and Shopify each tumbling 3% approximately after hours.
Recently, social media platform Twitter Inc sued Tesla CEO Elon Musk to push him to fulfil the deal he made in April this year. Musk had cracked a deal to acquire the social media company for $44 billion, in order to establish the right to free of speech.
Taking into account the current stock price of Twitter, several investors believe that it is a clear wager on the result of the soon arriving legal fight. Notably, it would end up representing less of the social media platform’s present capabilities. It is ready to present its second quarter results this week itself. However, it went on to cancel its traditional call with analysts indicating the Musk’s pending deal.
In Thursday’s report, Snap stated how daily active users on the platform increased by 18% through the years to a number of 347 million, surpassing estimates of analysts. However, this increase arrives as users of platforms witness rising inflation which could lead to a potential recession.