Shares of Meta platforms (Facebook, Instagram and WhatsApp), Google-owned Alphabet and other companies that sell digital ads fell after Snapchat owner Snap Inc ( SNAP.N ) blamed inflation for its slower growth income.
Snap was the first major social media company to release its quarterly earnings in September, and its stock fell 25%. Snap warned that there will be no revenue growth in the holiday quarter.
Shares of other companies that sell online advertising also fell: Meta down about 4%, Alphabet down 2% and Pinterest nearly 8%.
Snap's warning comes on the heels of already heavy losses in the social media company's shares, with Meta down about 60% year-to-date and Pinterest down nearly 40%. Investors worry that the economy could be seriously damaged by the US Federal Reserve's aggressive interest rate hikes aimed at cooling decades of high inflation.
In a letter to investors, Snap said inflation caused some advertisers to reduce their marketing budgets. The company announced in August that it would lay off 20% of its workforce and cut some projects in order to cut costs.
