This week Snapchat spooked the digital advertising world as it warned that the economy had deteriorated further and faster than it had anticipated. Investors, who have already fallen out of love with tech this year, didn't need to hear much more and sold SNAP shares aggressively, sending them down 43% yesterday.
SNAP: back to reality
Sometimes it's hard not to use the roller coaster analogy when talking about a stock — this is one of those times.
Beloved by Gen-Z (Snapchat had more Gen-Z users than even TikTok had last year), Snapchat has been slowly maturing since its IPO in 2017. Despite its best features being borrowed and copied, SNAP's 12-month revenue is up 9x and its daily active users have exactly doubled (to 332 million) and yet the company's share price is now half where it was after its first day of trading back in 2017, having hit the highs of $83 as recently as September 2021.
SNAP's warning has everyone worried that the advertising market is about to take a serious turn for the worse. Despite Snapchat's relatively modest size, the news rocked Meta, which saw its share price fall 8%, Twitter (-6% yesterday) and Pinterest (-24%).