Amid announcing Pixy Drone and rolling other features, Snapchat forgot to take care of its state in the market. Let’s uncover what’s behind this Snapchat stock plunge.
Snapchat Stock Plunge in May 2022
In the after-hours trading on Monday, the Snapchat SNAP -3.30% ▼ stock plunged by 30%. The rate of an individual snap share was reported below $16. This was a one-day fall. If we look at an extended time frame, the Snapchat stock was at an all-time high in September. Compared to it, the stock has fallen by more than 80%. Also, read What Does MB Mean on Snapchat | Internet Slangs You Must Know! This fall in the Snap stocks was seen after the Snapchat CEO, Evan Spiegel announced about missing the targets of the current quarter. Spiegel mentioned that while the company’s revenue is growing year-over-year, the growth rate is slower than expected. This has been because of a range of issues that have been revolving around the company. From rising inflation to Apple’s policy changes to the Ukraine war, all have contributed to the company’s slow growth. In April, the company announced that it expected anywhere between 20% to 25% year-over-year growth in revenue. The company also made a forecast regarding the EBITDA (Earnings before interest, taxes, depreciation, and amortization) to be between $0 and $50 million. However, on Monday, the company updated that it may report low revenue and low adjusted EBITDA. Snap reported low profits after the company could not fulfill its own sales forecast for the first quarter. Spiegel announced that the quarter was more challenging than they had expected. Also, read How to Remove Best Friends on Snapchat | 2 Methods to Try! CFO, Derek Anderson commented, “We are concerned that the operating environment ahead could be even more challenging, leading to further campaign pauses or advertiser budget reductions.” This may be the reason why Snapchat has not issued any financial expectations for the current quarter. According to Wallstreet Journal, after Snapchat’s announcement, the shares of other social media also fell. Facebook’s parent Meta Platforms Inc. fell by more than 7%, Pinterest Inc.’s stock fell by more than 12%, and Twitter dropped by 4%
Snapchat to Slow Hire This Year
On Monday, Evan Spiegal, Snapchat CEO announced that the company would perform slow hiring for the rest of the year. This announcement came after the CEO warned the investors about the company missing its own targets in the current quarter. Also, read Best Snapchat Username Ideas in 2022 | Get Ideas and Stand Out in Crowd! The company will slow hire some of the positions this year. It will focus on recruiting the roles that have been listed for this year. However, it is planned that some of the staff would be added next year. It was announced that Snap will hire only 500 more people for the rest of the year. This is a lot less compared to the 2000 people it hired last year. The company also announced that it will be evaluating the budget for the remaining 2022 to find any additional costs. Snapchat follows the move of its rivals. Earlier this month, Meta also announced a sharp decline in hiring. So did Twitter and other companies like Uber Technologies. All the companies are searching for a way to reduce spending.
Twitter Reaction on Snapchat Stock Drop
- This One Looks Like a Shareholder Also, read What Does The X Mean On Snapchat (2022) | How To Remove ‘Grey X’ On Snapchat?
- Crypto Investors be Like…
- Will it be Another Social Media to go Under?
- Some People are Worried About Other Stocks Also, read What Does WCW Mean on Snapchat | Update Your Gen-Z Slang!
- Hahaha, Some Witty Stock Jokes
- Opinions of Previous Stock Holders
- One for Snapchat Stocks and Kylie Jenner Also, read What is Quick Add on Snapchat & How to Turn it Off in 2022
Wrapping Up
It is time to wrap up! In this article, I have told you everything regarding the Snapchat stock plunge. The company’s stocks have fallen by 30% in the after-hours of Monday. Snapchat has not been able to cover up this quarter’s profits, resulting in a stock plunge. This has affected the stocks of other major social media companies as well. We will update the article as soon as we find new information about Snapchat stocks. Do visit Path of EX for daily dose of trending news!
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