Snap (SNAP) is hammered. Shares of the social media/camera company, which traded as high as $83.11 in September 2021, have since plummeted amid rising inflation, the war in Ukraine and Apple’s privacy changes.
Snap’s shares plummeted an impressive 74.5% year-to-date on Monday, falling to $12 before the New York market close.
Snap hinted that the pain could linger, warning in a filing with the Securities and Exchange Commission last month that it will likely fall short of its second-quarter guidance when it reports its earnings for the current quarter.
Snap — with 332 million daily active users — is far smaller than rivals Instagram, which continues to ape the myriad features of the ephemeral messaging app, and TikTok, which already has more than 1 billion users. As shares of ad-dependent tech companies plummet across the board, Snap seems to be taking the most brutal hits.
Google (GOOG, GOOGL) is also being beaten, but its shares are down just 22.9% year-to-date, underperforming the broader S&P 500 but still outperforming Snap. Heck, even Facebook and Instagram’s parent Meta (META) — down a whopping 47.8% year-to-date — beats Snap.
That’s not to say Snap isn’t doing well at a fundamental level. In its earnings report for the first quarter of 2022, Snap saw an 18% year-over-year increase in daily active users (DAUs) and a 38% year-over-year jump in revenue to $1.06 billion.
Still, that kind of growth has been slower than performance in the first quarter of 2021, when Snap saw year-over-year DAUs soar 22% and revenue 66%.
CEO Evan Spiegel acknowledged the slowdown in the first quarter of 2022 and lauded the company for its continued growth despite a challenging macroeconomic environment.
Snap faces the same headwinds as other industry players, including the war in Ukraine, inflation, the specter of rising interest rates, and Apple’s iOS privacy changes.
Called App Tracking Transparency or ATT, this change from Apple allows users to opt out of apps tracking their movement across different apps and websites. By preventing apps from tracking users across the internet, ATT makes it harder to target users with specific ads. As a result, advertisers no longer know exactly who is seeing their ads and how effective their campaigns are.
The story goes on
While Snap’s CBO Jeremi Gorman told investors during the company’s Q1 earnings call that it was working to improve ad targeting, the process will take time. For their part, Snap investors could flee sooner rather than later.
Sign up for the Yahoo Finance tech newsletter
More from Dan
Follow Yahoo Finance on TwitterFacebook, Instagram, Flipboard, LinkedIn, YouTube and reddit
Do you have a tip? Email Daniel Howley at [email protected]. Follow him on Twitter at @DanielHowley.