SNAP Stock Plunges

By Terrance Turner

May 23, 2022

Snap shares plunged more than 25% on Monday after CEO Evan Spiegel warned in a note to employees that the company will miss its own targets for revenue and adjusted earnings in the current quarter.

“Like many companies, we continue to face rising inflation and interest rates, supply chain shortages and labor disruptions, platform policy changes, the impact of the war in Ukraine, and more. Today we filed an 8-K, sharing that the macro environment has deteriorated further and faster than we anticipated when we issued our quarterly guidance last month,” Spiegel wrote in a note to employees. “As a result, while our revenue continues to grow year-over-year, it is growing more slowly than we expected at this time.”


In April, Snap reported first-quarter earnings that performed below Wall Street expectations for sales and profit. The company generated $1.06 billion versus the expected $1.07 billion and $3.20 in revenue per user as opposed to the expected $3.25, according to CNBC. At the time, the company said it expected between 20% and 25% year-over-year growth in revenue (lower than Wall Street’s estimate of 28%). It forecast adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of between $0 and $50 million.

We believe it is now likely that we will report revenue and adjusted EBITDA below the low end of the guidance range we provided for this quarter,” Spiegel wrote in a memo to employees obtained by The Verge. “We believe that the progress we’ve made growing our revenue, combined with the strength of our balance sheet, has positioned us well for the current environment.”

“We will slow our pace of hiring for unopened roles for the remainder of the year, as well as push some planned hiring into next year,” Speigel wrote. He went on to say that Snap expects to report revenue below the low-end of the guidance it gave investors for the current quarter. That news was also disclosed in a filing with the SEC that sent Snap’s stock price cratering to a low it hasn’t seen since mid-2020.


Snap’s stock plunged 30% in extended trading this afternoon, per CNBC. Snap’s industry peers also tumbled on the news. Shares of Facebook parent Meta dropped 7% in after-hours trading. Twitter fell almost 4%, while Pinterest slid 12%. (Snap, Inc. owns Snapchat, an instant messaging app in which photos and videos disappear within hours of their posting.)

According to Bloomberg BusinessWeek, “Shares in digital ad-dependent Snap tumbled as much as 38%, their biggest intraday decline ever, erasing about $13 billion in market value. Added to the value of declines for peers including Facebook-owner Meta Platforms Inc., Google-owner Alphabet Inc., Twitter Inc. and Pinterest Inc., the group has seen $147.3 billion wiped out.

Social media stocks shed about $147 billion in market value Tuesday after Snap Inc.’s profit warning, adding to woes for the sector which is already reeling amid stalling user growth and rate-hike fears.” 

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