Snap Inc. experienced a significant decrease in its share price, falling over 15% in premarket trading following its forecast of reduced advertising revenue due to economic uncertainties related to tariffs. The social media company reported a slowdown in ad spending in the second quarter, particularly from Chinese e-commerce platforms, which saw a more than 50% drop in spending on major ad platforms. Analysts remain split on whether this reflects broader market trends or specific challenges facing Snap.
Snap shares plummeted over 15% in premarket trading after the company revealed a cautious forecast, raising concerns about advertiser spending due to economic uncertainties.
Snap's CFO highlighted that the advertising budget cuts by some advertisers were due to tariff changes affecting the de minimis exemption for imported goods.
According to Sensor Tower data, daily ad spending by Chinese e-commerce websites on platforms like Facebook and Snap has decreased by over 50% in Q2.
Despite Snap's concerns, Jefferies analysts suggest that the company's cautious outlook may not necessarily indicate a broader slowdown in the advertising market.
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