Snap’s (SNAP) stock is down 40% mid-morning after slashing its second-quarter profit outlook and giving a warning about the macro environment.
Shares of the parent company of social media app Snapchat sank below their IPO price of $17 during its biggest intraday drop on record.
“Since we issued guidance on April 21, 2022, the macroeconomic environment has deteriorated further and faster than anticipated,” Snap wrote in an SEC filing.
“As a result, we believe it is likely that we will report revenue and adjusted EBITDA below the low end of our Q2 2022 guidance range,” read the filing.
Snap is also expected to slow hiring.
“Like many companies, we continue to face rising inflation and interest rates, supply chain shortages and labor disruptions, platform policy changes, the impact of the war in Ukraine, and more,” CEO Evan Spiegel wrote in a note to staff, according to Bloomberg.
SNAP’s fall is also dragging down other companies dependent on advertising, such as Meta (FB) and Alphabet (GOOG) (GOOGL).
The markets have been on a downward trend since the Federal Reserve announced it will tighten monetary policy in order to cool inflation. The Nasdaq (^IXIC) is currently down about 29%.
Growth stocks in particular have gotten heavily beaten amid high inflation and rising interest rates.
Ines is a markets reporter covering stocks from the floor of the New York Stock Exchange. Follow her on Twitter at @ines_ferre
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