Dark times for social media: Shares of platforms like Twitter, Facebook, Snapchat et al. have dropped significantly over the past week. According to the operator, the worsening economic situation is to blame. Microblogging service Twitter also accuses Elon Musk.
Dark times await social networks. At least that can be inferred from the current stock price. Shares of many social media companies fell sharply last Friday, according to news reports Reuters reported.
So it is with shares on social networks
The share price of Facebook’s parent company Meta fell 5.6 percent, while Google owner Alphabet lost 3.3 percent. Shares of the online board Pinterest even fell by 11.3 percent.
However, the shares of Snapchat operator Snap Inc. fell the most, falling by a total of 36.4 percent. They were the most traded on US exchanges as the company said it was looking for new sources of revenue to grow.
If stocks stay where they are, Pinterest, Meta, Twitter, Alphabet and Snapchat combined would lose about $42 billion in market value, according to Reuters.
Spending on advertising on social networks is decreasing
Twitter and Snapchat, in particular, have signaled that advertising will be curtailed. It is a reaction to the ever worsening economic situation.
Rising interest rates and ever-increasing inflation are cited as reasons. Labor shortages and supply chain disruptions are expected, Snapchat said last week.
Twitter blames Elon Musk for stock slump
Advertising and total revenue for the second quarter were well below analysts’ expectations. According to Jasmine Enberg, principal analyst at Insider Intelligence, the numbers would show that Twitter has a lot of work to do.
Twitter is now in the unenviable position of convincing advertisers that its ad business is solid, regardless of the outcome of Musk’s lawsuit.
More quarterly reports are now eagerly awaited from major social media platforms Meta and Alphabet. Analysts conclude from the falling share price that the quarterly numbers will reflect the current situation as well.