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© Reuters. FILE PHOTO: A woman stands in front of the logo of Snap Inc. on the floor of the New York Stock Exchange (NYSE) while waiting for Snap Inc. to post their IPO, in New York City, NY, U.S. March 2, 2017. REUTERS/Lucas Jackson
By Noel Randewich
(Reuters) - Facebook-owner Meta Platforms, Google-owner Alphabet (NASDAQ:GOOGL) and other companies that sell online ads lost about $80 billion in combined stock market value on Thursday after Snap (NYSE:SNAP) posted poor quarterly results and warned of an uncertain outlook.
Slammed by a weakening economy, increased competition from TikTok and recent privacy changes on iPhones, the Snapchat owner missed second-quarter revenue targets and warned that "forward-looking visibility remains incredibly challenging."
Its shares collapsed 26%, bringing Snap's loss in 2022 to over 70%.
With Wall Street already worried about a potential recession, Snap's report also sparked a selloff in rival internet ad sellers. Meta dropped 5% in extended trade, while Alphabet fell 3% and Pinterest (NYSE:PINS) tumbled 7%.
Twitter (NYSE:TWTR)'s shares fell less, losing just under 2%.
The drop in Alphabet's shares cut its market capitalization by over $40 billion, and Meta's loss reduced its market capitalization by about $25 billion. The drop in Snap's shares evaporated $7 billion of its value.
Snap's poor report also hit other growth stocks, with Spotify (NYSE:SPOT) Technology, Shopify (NYSE:SHOP) and Roblox down around 3% each after hours.
With Twitter suing Elon Musk to force the billionaire to make good on his April promise to buy Twitter for $44 billion, many investors view Twitter's stock as a wager on the outcome of that upcoming legal battle, and less as a reflection of the company's current fundamentals.
Twitter is set to report its quarterly results early on Friday, but the micro-blogging platform has canceled its traditional call with analysts, pointing to Musk's "pending acquisition".
In its report, Snap said its daily active users rose 18% year-over-year to 347 million, beating analysts' expectations.
But that user growth comes as the customers of social media companies face inflation at 40-year highs and brace for a potential economic downturn, an environment where brands spend less on advertising and apply greater scrutiny to how they spend their advertising dollars.
Alphabet posts its second-quarter results on July 26, Meta reports on results on July 27, and Pinterest on Aug. 1.
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