U.S. markets closed
  • S&P Futures

    4,292.50
    -5.75 (-0.13%)
     
  • Dow Futures

    33,839.00
    -34.00 (-0.10%)
     
  • Nasdaq Futures

    13,664.00
    -17.25 (-0.13%)
     
  • Russell 2000 Futures

    2,021.70
    -2.10 (-0.10%)
     
  • Crude Oil

    88.32
    -1.09 (-1.22%)
     
  • Gold

    1,792.30
    -5.80 (-0.32%)
     
  • Silver

    20.12
    -0.15 (-0.73%)
     
  • EUR/USD

    1.0154
    -0.0010 (-0.10%)
     
  • 10-Yr Bond

    2.7910
    -0.0580 (-2.04%)
     
  • Vix

    19.95
    +0.42 (+2.15%)
     
  • GBP/USD

    1.2038
    -0.0020 (-0.17%)
     
  • USD/JPY

    133.3650
    +0.0930 (+0.07%)
     
  • BTC-USD

    24,186.18
    -189.53 (-0.78%)
     
  • CMC Crypto 200

    574.59
    -16.17 (-2.74%)
     
  • FTSE 100

    7,509.15
    +8.26 (+0.11%)
     
  • Nikkei 225

    28,852.36
    -19.42 (-0.07%)
     
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Snap's report incinerates $80 billion in ad industry market cap

·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

By Noel Randewich

(Reuters) - Facebook-owner Meta Platforms, Google-owner Alphabet and other companies that sell online ads lost about $80 billion in combined stock market value on Thursday after Snap posted poor quarterly results and warned of an uncertain outlook.

Slammed by a weakening economy, increased competition from TikTok and recent privacy changes on iPhones, the Snapchat owner missed second-quarter revenue targets and warned that "forward-looking visibility remains incredibly challenging."

Its shares collapsed 26%, bringing Snap's loss in 2022 to over 70%.

With Wall Street already worried about a potential recession, Snap's report also sparked a selloff in rival internet ad sellers. Meta dropped 5% in extended trade, while Alphabet fell 3% and Pinterest tumbled 7%.

Twitter's shares fell less, losing just under 2%.

The drop in Alphabet's shares cut its market capitalization by over $40 billion, and Meta's loss reduced its market capitalization by about $25 billion. The drop in Snap's shares evaporated $7 billion of its value.

Snap's poor report also hit other growth stocks, with Spotify Technology, Shopify and Roblox down around 3% each after hours.

With Twitter suing Elon Musk to force the billionaire to make good on his April promise to buy Twitter for $44 billion, many investors view Twitter's stock as a wager on the outcome of that upcoming legal battle, and less as a reflection of the company's current fundamentals.

Twitter is set to report its quarterly results early on Friday, but the micro-blogging platform has canceled its traditional call with analysts, pointing to Musk's "pending acquisition".

In its report, Snap said its daily active users rose 18% year-over-year to 347 million, beating analysts' expectations.

But that user growth comes as the customers of social media companies face inflation at 40-year highs and brace for a potential economic downturn, an environment where brands spend less on advertising and apply greater scrutiny to how they spend their advertising dollars.

Alphabet posts its second-quarter results on July 26, Meta reports on results on July 27, and Pinterest on Aug. 1.

(Reporting by Noel Randewich; editing by Richard Pullin)