Snap Inc, owners of Social media application, Snap chat (SNAP.N) had its shares sink nearly 30% in premarket trading on Friday, after the company’s forecast of zero revenue growth pointed to more pain ahead for a social media sector heavily dependent on digital advertising.
YouTube-parent Alphabet Inc (GOOGL.O), Facebook-parent Meta Platform Inc (META.O) and Pinterest Inc (PINS.N) fell between 2% and 7%.
Twitter Inc (TWTR.N) on the other hand, slid 8%, also dragged by fears of security reviews of billionaire Elon Musk’s takeover bid.
Analysts rushed to cut their price target on the stock, with Morgan Stanley taking it to a Wall Street low of $7, below the $7.74 the stock was trading at.
The digital ad space has suffered as brands have cut marketing and ad budgets in response to declining consumer demand. Snap’s warning exacerbated the fears.
So far this year, digital ad companies have together lost roughly $1 trillion in value, hit by intense competition from TikTok and challenges from Apple Inc’s privacy changes to its iOS platform that allows users to opt out of data tracking.
Snap reported its slowest revenue growth as a public company for the latest quarter on Thursday, and forecast no revenue growth for the typically busy holiday quarter.