(Bloomberg) — Social media stocks lost more than $160 billion in market value Tuesday after Snap Inc.’s profit warning, adding to woes for a sector that is already reeling from stalling user growth and rate-hike fears.
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Shares in digital ad-dependent Snap tumbled as much as 41%, their biggest intraday decline ever to trade below its 2017 initial public offering price of $17. The selloff erased about $15 billion in market value. Added to the value of declines for peers including Facebook-owner Meta Platforms Inc., Google-owner Alphabet Inc., Twitter Inc. and Pinterest Inc., the group saw as much as $201.8 billion wiped out at their session lows, before paring some losses.
The news spurred widespread selling across the advertising and ad-tech space. Among notable decliners, Trade Desk Inc. sank 20%, fuboTV Inc. lost 8%, Magnite Inc. lost 14%, LiveRamp Holdings Inc. slid 9%, Roku Inc. dropped 17%, and Vizio Holding Corp. was down 8.1%. In addition, Omnicom Group Inc. fell 6.4% and Interpublic Group of Cos lost 4.9%.
“At this point, our sense is this is more macro and industry-driven versus Snap specific,” Piper Sandler analyst Tom Champion wrote in a note.
Others on Wall Street agreed, with Citi analyst Ronald Josey saying “a slowing macro is likely impacting advertising results across the broader Internet sector, although we believe platforms more exposed to brand advertising—like Twitter, Google’s YouTube, and Pinterest—are likely experiencing a greater impact overall.”
The owner of the Snapchat app, which sends disappearing messages and adds special effects to videos, reported quarterly user growth in April that topped estimates. But with the company saying just a month later that it won’t meet prior forecasts for revenue and profit, analysts noted a rapid deterioration of the economic environment.
Snap and platforms like Facebook and Google are competing for advertising dollars at a challenging time. Spiraling inflation is putting pressure on companies and consumer spending, while recent privacy changes, such…