Social media and online advertising shares fell after Snap’s earnings report

Snap Inc. signs are displayed on screens outside the Morgan Stanley building in New York.

Michael Nagle | Bloomberg | Getty Images

Shares of social media and ad tech tumbled after hours on Thursday after Click reported disappointing second quarter results and plans to slow down hiring.

Analysts had expected sales growth of 18% in the third quarter, according to Refinitiv, but the company said revenue was “roughly unchanged” over the period.

Snap shares fell 26% after hours, and as investors look to second-quarter results from companies that also depend on online advertising, their stock has followed suit.

Social media companies hit the hardest as parent Facebook Meta dropped by more than 5% and pinterest fell almost 7% and Twitter fell 2%. trading tableshares fell nearly 7% and shares in Google’s parent company Alphabet fell 3%.

Snap attributed the disappointing results to a slowdown in demand for its ad platform, increased competition from companies like TikTok, and a difficult economy.

“The second quarter of 2022 was more challenging than we expected,” Snap said in a letter to investors. The company added that it does not provide guidance for the third quarter because “predictability remains incredibly difficult.”

Overall, Snap shares have lost almost two-thirds of their value in 2022.

“We are not satisfied with the results achieved,” the company said in a letter.

Twitter is due to report earnings on Friday morning, followed by Meta and Google next week. Analysts say they expect Meta’s revenue to decline this quarter.