October 1, 2022

Taylor Daily Press

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Snapchat and Twitter shares plunge on social media: $47 billion evaporated in the stock market

Snapchat and Twitter shares plunge on social media: $47 billion evaporated in the stock market

A day after Snapchat published disappointing revenue results, industry peer Twitter also disappointed analysts and investors on Friday. This led to panic among investors.

Christoph Simons

In April, May and June, Snap, the company behind the Snapchat app, had sales of $1.11 billion (about $1.09 billion). Despite the 13 percent increase, revenue remained below the $1.14 billion target set by analysts. Below the line, the loss increased from $152 million in the second quarter of 2021 to $422 million last quarter. The number of daily active users increased in three months: from 332 to 347 million. The fact that Snap explicitly cited late advertising revenue as an explanation for the low results has investors very worried. They feared that other social media companies — Meta Platforms (Facebook), Pinterest, Google (Alphabet), and Twitter — would also fall under the bar as a result.

Those fears turned out to be completely unfounded, when Twitter was disappointed on Friday, too. Blue Bird had sales of “only” $1.18 billion (about 1.15 billion euros) in the second quarter, while analysts had expected $1.32 billion. Twitter posted a net loss of $270 million for the second quarter compared to a net profit of $66 million a year earlier. It added 8.8 million new users, bringing the total to 237.8 million daily active users. It’s still significantly lower than Snapchat’s 347 million or Facebook’s 1.96 billion.

the noise

And so he was keen to see how the US stock market would trade. Snap immediately received a nearly 37 percent increase at opening, and Pinterest fell by 12 percent. Facebook’s parent Meta lost about 6 percent, and Alphabet over 3.5 percent. According to Bloomberg News, the market value has increased by nearly $47 billion.

Twitter only managed to limit the damage. Although the stake was already much lower after the failed acquisition by Tesla chief Elon Musk.

Next week, Meta Platforms, Alphabet, Apple, Microsoft and Amazon will announce their quarterly results.

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