Snap shares plunge 27% after another bad quarterly report
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American technology company Snap (owns the Snapchat social network) finished third quarter with a net loss of $359.5 million — thus, the loss increased five times compared to the same period in 2021. Snap’s revenue rose 6% to $1.1 billion, slightly below analysts’ expectations. In addition, the company, as in the second quarter, decided not to publish a detailed forecast for the next quarter, saying that revenue in it, most likely, will not grow. Poor reporting coupled with a similar outlook sent Snap’s stock down 27% on Wednesday.
Since the beginning of the year, Snap shares are down nearly 77%. In August the company announced on restructuring plans involving the closure of several projects, as well as the dismissal of 20% of employees. Snap publishes financials before most technology companies, so investors perceive its results as an indicator of the state of the social media market and digital advertising in general. After the publication of Snap’s reporting, Meta shares (recognized as extremist and banned in the Russian Federation) fell by 4%, Alphabet shares – by 2.7%, Pinterest shares – by 8%. Forrester analyst Kelsey Chickering said amid the downturn, many companies will focus their online advertising on a small number of strong sites. “Unfortunately for Snapchat, its share of ad budgets will continue to shrink as marketers switch to the most effective and trusted channels,” she said.
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