Snapchat’s parent company’s shares tumbled over 41 per cent in early morning trading in the US today, after the company warned against dwindling revenues and slowing recruitment.
“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,” Snap CEO Evan Spiegel wrote in a memo. “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.”
Not only has this whacked a staggering $14bn off the firm’s market value, but the falling fortunes of Snap have also sparked a wider tech and internet sell off.
Fellow social media giant Meta and Pinterest saw shares fall over nine and 26 per cent respectively on Wall Street this morning.
Meanwhile, Twitter’s stock has dropped nearly three per cent, and Google-parent Alphabet is falling over seven per cent.
If the losses hold, the tech giants could be set to lose nearly $140bn (£112bn), according to calculations by Reuters.
Head of TMT Research at Mirabaud GTS Neil Campling called the plunge “absolute carnage”.
“On the one hand it seems incredulous that a relatively small social media firm can take down the whole market. On the other it’s a reminder that the market is so sensitive that any bad news from a tech company can dominate the psychology of investors. A classic bear market, shoot first and ask questions later”, he told City A.M.
Wall Street only just rebounded on Monday after a steep selloff last week, reminiscent of the dotcom bust.
Meta’s chief financial officer David Wehner recently warned against slowing growth, and said: “We need to take another look at our priorities and make some tough decisions”.
Meanwhile, Twitter execs recently said the company would be “pulling back on non-labour costs to ensure we are being responsible and efficient”; this comes despite Elon Musk’s grand ambitions following his supposed $44bn takeover.