Most Read by Bloomberg The Snapchat parent plummeted 27% in the after-hours session. Facebook’s parent company Meta Platforms Inc. and Pinterest Inc fell more than 4% each, while Google owner Alphabet Inc. and Twitter Inc. also retreated. The losses mark the second major industry selloff triggered by Snap in two months, as its results become a barometer for investors trying to decipher how economic uncertainty has affected ad spending. There are growing signs that tech companies are bracing for a recession with some cutting back on hiring, while Meta has lost about half its value this year after disappointing revenue forecasts. “Earnings optimism may be on hold for now,” said Tina Teng, market analyst at CMC Markets Plc. in Auckland. “Snap’s miss on earnings expectations indicates the serious challenges facing its tech players, typically on social platforms like Meta Platforms.” Snap — which saw its $6 billion valuation wiped out after hours on Thursday — did not issue financial guidance for the third quarter, except that revenue so far in the period is roughly flat compared with last year. Management also reiterated that it plans a “significantly reduced rate of hiring,” echoing Apple Inc.’s plans. and others. Vital Knowledge called the results from Snap and hard drive maker Seagate Technology Holdings Plc “awful” and “bad”. Already struggling tech stocks may face more pressure as earnings season ramps up next week. The story continues READ: Snap Growth to 2023 Muted on Uncertainty: Bloomberg Intelligence “With more and more large-cap tech companies planning to slow hiring and downgrade their growth expectations, the economic outlook is certainly not in good shape,” said CMC’s Teng. (Adds context and analyst comments) Most Read by Bloomberg Businessweek ©2022 Bloomberg LP
