Snap drags social media on Wall Street

A day after announcing its financial results for the third quarter of 2021, the shares of Snap, parent of the social network of images Snapchat, fell 26.59% on the New York Stock Exchange, to 55.14 dollars each.

In fact, the titles of technology companies that depend on digital ads also fell, such as Facebook (-5.05%), Alphabet, parent of Google (-3.04%), Twitter (-4.83%); Pinterest (-5.36%), Amazon (-2.90%) and Microsoft (0.51%).

Snap’s downfall came amid alerts from analysts regarding a prolonged impact on the photography app company stemming from Apple’s privacy settings on iOS devices.

Apple’s privacy updates, which rolled out in June and July, prevent advertisers from tracking iPhone users without their consent. As a result, advertisers ended up spending much less than expected as the changes make it difficult to measure and manage their ad campaigns.

They reduce target price

More than 10 analysts covering Snap’s shares lowered their price target by at least $ 4 to $ 25, with many warning that the impact of Apple’s move would persist into next year as Snap will implement its own tools to attract advertisers. .

“The changes to the Apple iOS announcements had a much larger effect, than virtually no one expected, on Snap’s fourth-quarter outlook,” said Doug Anmuth, an analyst at JP Morgan in a note.

Anmuth expects the short-term impact of the privacy changes to be more acute for Snap than for Facebook, Alphabet or Twitter.

The US investment bank estimated that at least two-thirds of Snapchat’s parent company’s fourth-quarter revenue will decline as a result of the move.

Snap, which derives the vast majority of its revenue from the sale of digital advertising in its app, said the problem was compounded by global supply chain disruptions and labor shortages, prompting brands to cut their prices. expenses related to advertising. (With information from Reuters)

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