Snapchat Down 40% as Company Cuts Revenue and Profit Forecasts
May 24, 2022 By MarketDepth
Snap Inc. (NAS:SNAP) is down 40% Tuesday as the company announces a major cut to its revenue and profit outlooks. The stock price has now sunk below the IPO and has dragged down the whole social media sector by over $100 Billion. The pressure from covid restrictions lifting causing users to spend less time on the app has impacted the bottom line for the company.
“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.”Chief Executive Officer Evan Spiegel
The company also announced a cut back on staff hiring by cutting back to 1,400 positions available by year end, which is down from 1,800 in 2021. With companies trying to navigate out of the pandemic and the stock market tumbling from highs many major corporations including Uber and Meta have already announced staff cut backs.
“The macroeconomic environment has deteriorated further and faster than anticipated. As a result, we believe it is likely that we will report revenue and adjusted Ebitda below the low end of our Q2 2022 guidance range.”Snap said in a filing