The company was on track to lose $15 billion in market capitalization, while stocks of major online advertisers and social-media firms were to lose a combination of $200 billion by this route.
Meta platforms, Pinterest, Twitter and Google-parent Alphabet were all down between 7% and 24%.
Snap said on Monday it was expecting to miss its quarterly revenue and profit targets set a month ago and will have to slow hiring and lower spending.
The bleak view from one of the sector’s well-known names underscores the impact of the Ukraine war, rising inflation and raising interest rates on social media companies as they try to offset the hit from changes to Apple’s iOS operating system. Was doing.
“Snap is a proxy for online advertising and when you see a weakness out there you automatically think of Facebook, Pinterest and Google,” said Dennis Dick, a trader at Bright Trading LLC.
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“Once you start thinking about Google, that’s when the market starts to sell out.”
Tuesday’s sell-off comes days after a Bank of America survey of fund managers indicated investors are increasingly bearish on tech stocks, in contrast to the bullish trend over the past 14 years.
Snap shares were trading at $13.3, which is down from their 2017 IPO price of $17.
Analysts said Snap’s outlook for core profits suggested spending would outpace its revenue growth, noting that headcount stood at 52% last quarter.
“There’s a lot to deal with in a macro environment today,” Chief Executive Officer Evan Spiegel said at a tech conference on Monday.
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