Snap, the parent company of the popular Snapchat social media service, reported earnings last week that investors rejected. In the wake of its second-quarter financial reporting, shares of Snap cratered from $16.81 Thursday afternoon, before its earnings report, to around $10 per share as of this morning.
Snap was not the only victim of its lackluster earnings digest — other companies that make money off of advertising incomes saw their share prices dip on concerns that the social network was not an outlier. Alphabet, Meta, and Pinterest also took blows, cutting their worth ahead of earnings disclosures as investors lowered their hopes for ad-based incomes.
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Given the sheer number of mega-tech companies that are betting on the advertising market, the news matters. Mix in the fact that startups are also pursuing ads as a monetization lever, and concerns about the health of advertising spending matter to tech companies big and small.