Snapchat -snap- plummeted more than 41%, to US$13.05, at the start of operations this Tuesday, May 24, and its sharp drop worries the entire technology sector . The sharp decline in share price comes as the company’s CEO, Evan Spiegel, warned his employees that the firm will miss its own revenue andtargets this quarter.
Snapchat’s parent company filed an 8-K form with the United States Securities and Exchange Commission -SEC-. to lower its previously issued forecast for the second quarter. When Snap originally issued its guidance for the quarter on April 21, the company forecast second-quarter revenue to come in 20% to 25% above the same period a year ago.
the company stated in the filing . Snap, like many companies across industries, is plagued by inflation and rising interest rates , but the change in Snap’s forecast just weeks after it was issued shows warning signs for investors who had hoped it would. the tech sector could boost markets.
And it is that the reaction of the investors was immediate, with Snap’s shares yielding nearly 41% in after-hours operations and dragging behind it other companies in the social networking sector such as Meta (Facebook’s parent company) , whose shares yielded 8.25% in after-hours operations, or Twitter, whose price fell about 4%, or Pinterest, which dropped 21%.