Shares of Snap Inc sank about 25 percent before the bell on Friday, after the owner of the photo messaging app Snapchat forecasted zero revenue growth for the current quarter, triggering a slide in other social media stocks dependent on advertising revenue.
YouTube-parent Alphabet Inc, Facebook-parent Meta Platform Inc, Pinterest Inc and Twitter Inc all slid between 1.7 percent and 9.2 percent in premarket trade.
"We believe Snap is facing increased competition, primarily from TikTok, both for time spent and increasingly for ad dollars, which is compounding the challenges of a softer macro and Apple's (privacy-related) changes," Atlantic Equities analysts said in a note.
The brokerage said competition is likely to continue to increase in 2023.
Snap, on Thursday, reported its slowest revenue growth as a public company for the latest quarter and forecast no revenue growth in the typically busy holiday quarter, while Wall Street analysts were expecting a 3.3 percent rise, according to Refinitiv data.
The company had said in August it would lay off 20 percent of its employees and discontinue projects such as gaming and a flying camera drone to cut costs and brace for a deteriorating economy.
"Given SNAP had been growing headcount over 30 percent YoY for four straight quarters, we wonder if the company can execute on its lofty growth objectives with a 20 percent smaller employee base," Jefferies analysts said in a note.
Snap's stock, now trading at $8.06, has lost about 77 percent of its value so far this year, while Alphabet, Meta and Pinterest have lost between 30 percent and 60 percent. Twitter, however, has gained 21 percent on the prospect of billionaire Elon Musk buying the company.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Bihar Lok Sabha elections 2024: Schedule, total seats, Congress candidates and more
Apr 16, 2024 1:02 PM
Lok Sabha polls: BJP drops Som Parkash, fields Abhijit Das against Mamata's nephew
Apr 16, 2024 12:49 PM
Bihar Lok Sabha elections 2024: Check polling dates, schedule, BJP candidates and more
Apr 16, 2024 12:32 PM
Home buyers in Noida threaten to boycott Lok Sabha polls — here's why
Apr 16, 2024 10:09 AM