Being an innovative social media company is no small feat, with most of the valuation based on hopes of perpetual growth in ad revenue. Except that, when these revenues stagnate or worse, decline, the sanction is not long in coming. Snap, which has only been profitable for one quarter in more than 10 years, saw its share price fall 43% on Tuesday, May 24 after it missed its revenue and profit targets, due to a market sentiment. unfavorable. “The macroeconomic environment has deteriorated further and faster than expected,” said its director and founder, Evan Spiegel. “As a result, we believe it is likely that we will report revenue and Adjusted EBITDA below the lower end of our guidance range for the second quarter of 2022.”
The fall of the ephemeral photo-sharing social network has dragged everyone in its path. On the American side, Pinterest lost nearly 24% after the announcement, Meta and Alphabet dropped 7.6% and 5%, while Prosus and Publicis lost 6.7% and 7.42% on our side of the Atlantic.
Stock history of Snap, Netflix, Alphabet, Meta and Pinterest since April 1, 2022
Other players in similar and neighboring sectors are now under pressure, each misstep being harshly punished by ruthless investors. It remains to be seen whether, like the photos shared on the network, this fall in advertising revenue will only be ephemeral, or fatal.
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