-
After Snapchat owner Snap (SNAP.N) blamed inflation for its slowest revenue growth since its IPO five years ago, Google owner Alphabet and other companies that sell digital advertising have It fell late Thursday.
Snap became the first major social media company to report its September quarter results, and its stock plunged 25% after disappointing aftermarket results. Snap has warned that sales won’t grow during the typically busy holiday quarters.
Shares of other companies that sell internet ads also fell, with Facebook owner Meta (META.O) about 4%, Alphabet (GOOGL.O) 2% and Pinterest (PINS.N) 8%.
Altogether, the recent plunge in trading has removed more than $40 billion in market value from these companies and other internet advertising firms such as Spotify (SPOT.N) and Roku (ROKU.O).
Investors fear that aggressive interest rate hikes by the US Federal Reserve, aimed at curbing decades of inflation, could seriously hurt the economy.
Snap’s warning comes after stocks of social media companies have already fallen significantly, with Meta down nearly 60% year-to-date and Pinterest down nearly 40%.
Snap’s stock, which last traded at around $8 a share, is now down 90% from its September 2021 high. Snap debuted on the stock market in his 2017 with a long-awaited IPO of $17 per share. In a letter to investors, Snap said inflation is prompting some advertisers to cut their marketing budgets.