Snap spies investors with macroeconomic warnings

Snap lost nearly one-third of its value on Monday after a social media group said it was plagued by worsening macroeconomic conditions with unplanned earnings warnings.

Snapchat’s parent company said in a regulatory filing that “the macroeconomic environment is worsening even faster than expected” since the earnings announcement on April 22.

As a result, he added that interest, depreciation, and pre-amortization earnings and adjusted earnings are expected to be “below the lower bound” in the guidance range this quarter.

In a note to staff, CEO Evan Spiegel said the business fundamentals remained “strong”, but the company said “inflation and rising interest rates, supply chain shortages and labor disruptions,” Platform policy changes, the impact of war Ukraine, etc. “

He said the company would slow down hiring and invest “at a slower pace than planned for the operational environment.”

The US tech sector has been booming over the past two years as users of the coronavirus pandemic lockdown are spending more time and money online.Those good luck is now Dramatic and rapid reversalHowever, concerns over rising interest rates, slowing economic growth, and supply chain turmoil have significantly increased stock sales, and some major tech groups have curtailed employment, reduced costs, and readjusted expectations. It came to be.

Snap’s stock fell 30% in after-hours trading to below $ 16. Other tech stocks, which derive most of their revenue from digital advertising, were also hit, with Meta and Google’s Alphabet down 8% and 5%, respectively. Meta recently lowered its recruitment target for 2022, but Uber is also keeping costs down.

“We will evaluate the remaining budget for 2022,” Spiegel said in a memo, adding that “leaders are being asked to consider spending to find additional cost savings.”

Based in Los Angeles snap Earlier, he said he expected adjusted EBITDA to fall between the break-even point in the second quarter and $ 50 million.

We also predicted that sales in the second quarter of 2021 during the pandemic blockade would increase by 116%, while sales in the second quarter would increase by 20-25% year-on-year.

Beyond the macroeconomic background, Snap is already facing other headwinds. Last October, it blamed Apple’s iPhone privacy changes for disruption in the advertising business, losing a quarter of its value due to the bleak outlook for the fourth quarter. This rule requires apps in Apple’s App Store to have explicit permission from the user to be tracked for advertising purposes.

“Our community continues to grow, with strong engagement across Snapchat and great opportunities to increase average revenue per user over the long term,” Snap said on Monday.

Snap spies investors with macroeconomic warnings

Source link Snap spies investors with macroeconomic warnings

Back to top button