Major social networks could lose over $100 billion (€94 billion at current exchange rates) in market value. It comes after Snap Inc CEO Evan Spiegel announced that it would miss its revenue and earnings targets for the quarter, with the company down more than 30% after business hours on Wall Street.
Bloomberg estimates that a Snapchat owner could lose $11.4 billion (€11 million) on the stock market. In pre-opening trades, the social media company is bracing for a record intraday drop, slipping another 29%.
“At this point, we think this is macro and not Snap-specific,” said Tom Champion, an analyst at Piper Sandler, quoted by the financial agency. That is, other social media giants such as Meta (formerly Facebook), Alphabet (owner of Google) or even Twitter and Pinterest can get into this web.
If this contagion effect occurs, the cumulative drop could reach $104 billion (€98 billion), according to Bloomberg. Spiegel’s announcement exacerbates the unreliability that has already been felt in the sector, as the number of new users slows and worries about the impact on the sector of various increases in base interest rates by the US Federal Reserve.
There is a broad consensus on Wall Street about pressure on the industry. RBC Capital Markets analyst Brad Erickson explains that ads on these platforms are declining, while recent privacy changes and new measures taken by Apple to limit user tracking are hindering growth in this segment, in contrast to what happened during periods of quarantine. to the covid-19 pandemic.
