News of Snap’s woes dragged down the shares of many of its rivals.
Investors in social media stocks are clearly nervous that advertisers may be pulling back on marketing spending due to a litany of concerns.
Russia’s invasion of Ukraine has led to skyrocketing oil and gas prices around the globe. In addition to higher energy costs, inflation pressures are also putting a dent in corporate spending. The recent uptick in Covid cases in China is another worrisome sign for businesses and consumers.
The advertising landscape has analysts concerned, too. Wells Fargo analyst Brian Fitzgerald said in a report Tuesday that “a broad ad market recession appears increasingly likely.”
JMP Securities analyst Andrew Boone cut his price target on Snapchat Tuesday, saying that “the advertising environment is worsening and we have no clear view that this is the bottom.”