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Snap can win squid games on social media

Viewers Netflix’s latest and greatest hit I know that no matter how basic the game is, there is no such thing as easy money when the stakes are high. Social media investors are learning the same lesson. Share of Snapchat owners

snap Ltd

Then lost almost a quarter of its value on Thursday evening Reported results..

Making money with stocks was like a child’s play. When I bought the Snap in the middle of March last year, I got “9 baggers” with a share of 890% or more in about 18 months. For the past two years, Snap has dominated even high-performing social media buddies.

It made the momentary cold and difficult reality even more painful. On Thursday, the company said it had missed even the lower end of its third-quarter earnings guidance, with growth of 57% over the period, below Wall Street’s estimate of about 62%. To make matters worse, the company led its fourth-quarter revenue growth to just 30% at the midpoint, nearly 20% below analysts’ expectations.

At an analyst conference call on Thursday Snap seemed to suggest that

Apple‘NS

Recent iOS changes had the biggest negative impact on the advertising business in the third quarter. There was also soft advertising spending related to supply chain issues affecting this quarter. None of that should be surprising to investors, but their depth of influence seemed to do so.

Perhaps what was lost in shuffle was the plus of Snap’s revenue release. According to the company, daily active users increased 23% year-on-year in the quarter, exceeding analysts’ expectations. Advertisers want to be where their users are, so growth should pay off once macroeconomic problems are resolved.

One of the recent Wall Street Journal surveys

Facebook

How emphasized Young users are shrinking slices For the decade of the company’s legacy Blue app, Snapchat is a particularly strong demographic. in the meantime,

Pinterest‘NS

According to a second-quarter report, the image-sharing platform lost 24 million monthly active users in a row. Question the capabilities of the platform Significantly grow your own user base in the short term.

Despite the Snap issue in the third quarter, management’s commentary on Thursday’s conference call suggested that Facebook might not work as well, or even worse. According to Snap, Apple’s ad tracking changes hit the business particularly hard in the third quarter.

on the other hand

twitter‘NS

Facebook said in the previous quarter that Pinterest’s platform is focused on brand advertising, and that direct response advertising remains a large part of its business and a major growth driver. Most ominous for the sector, Snap said the long-term impact of Apple’s changes “may not be apparent until at least a few months after the ecosystem stabilizes.”

Facebook is facing growth Regulatory pressureThe short-term technical and macro confusion will eventually disappear for Snap.At that point, the camera company You’re teeing up yourself well Significant growth with relatively new products such as SnapMap and Spotlight. According to Jeffreys analyst Brent Till, Snap has one of the more exciting 2022 setups. In a earnings preview, he warned that investors are likely to overlook the tailwinds of these new products. Snap Augmented Reality MonetizationInstead, focus on the evolving privacy environment and supply chain disruptions.

Rocky stretches for social media investors could be an opportunity to shift bets to more likely winners in this game.

Write in Laura Forman laura.forman@wsj.com

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Snap can win squid games on social media

Source link Snap can win squid games on social media

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