Snap, the parent company of popular messaging app Snapchat, plunged more than 35% on Wall Street on Friday, the day after it announced disappointing results and ad revenue.
Snap, which extended its losses to $422 million in the second quarter and announced a slowdown in hiring on Thursday, saw its stock fall 35.20% to $10.60 shortly after the US stock market opened. far from its 2017 IPO level at $17. .
Snapchat, which nevertheless has 347 million daily users -18% more than a year ago-, was sanctioned by investors, frightened by comments from its management that it intends to drastically tighten its belt in a context of reducing advertising spending .
“Catastrophic”
“We will substantially reduce the pace of recruiting … and also take a close look at our operating expenses,” Derek Andersen, Snap’s chief financial officer, said the day before, as the network’s two founders, Bobby Murphy and Evan Spiegel, now They will charge a symbolic $1 per year until 2026.
The application, first popular among the youngest, suffers from a reduction in the brand’s advertising spending but also from Apple’s regulatory change, which requires obtaining the consent of users before tracking their Internet browsing for advertising purposes.
“Snap has given us another disastrous quarter,” summed up Dan Ives of Wedbush Securities, interviewed by AFP.
These results “highlight a slowdown in digital advertising and the hurdles brought by Apple’s iOS privacy policy,” the analyst said.
Never a penny of profit
That said, he added, Snap is “like a paper plane in a storm that doesn’t represent a phenomenal barometer of the rate of slowdown in advertising for platforms like Facebook or Google.”
The fall of the title, however, spread to Meta (Facebook) which fell 5.75% to 172 dollars. The social media giant, which thrives on digital advertising, will announce its results on July 27.
Snap, which has yet to report an annual net profit, remains a small player in the global digital advertising market.
The app “represents less than 1% of global revenue … which makes it more sensitive to limitations than larger players like Meta,” said Insider Intelligence’s Jasmine Enberg.
The company has nearly 6,500 employees, 38% more than a year ago.
Source: BFM TV
