Snap’s warning over advertising triggers $100bn slide on Wall St

MORE than $100bn (£73bn) was wiped off tech stocks yesterday after Snap’s warning about advertising troubles triggered a sharp sell-off in New York.

The owner of Snapchat plunged by almost a quarter, putting the company on track for its biggest one-day slide.

Snap slumped in after-hours trading on Thursday night after revealing that revenues were expected to be significantly lower than analyst forecasts for the final three months of the year at between $1.16bn and $1.2bn. Analysts had been expecting $200m more.

The revised guidance followed changes made by Apple to its privacy policy earlier this year that blocked apps from tracking iphone users across the internet without gaining their explicit consent.

Under its new system, Apple aggregates data and provides it to advertisers three days later. Previously advertisers could access real-time information on how campaigns were performing.

The Snap chief executive, Evan Spiegel, said the changes had come as a “frustrating setback” for the company that generates almost all of its revenue from advertising.

However, he told investors that the company “fully supports” protecting users’ privacy in the longer term.

Snap’s finance chief, Derek Andersen, said: “It is still not clear what the longerterm impact of the IOS platform changes may be, and this may not be clear until at least several months or more after the ecosystem stabilises and advertisers are able to fully implement the new solutions we are developing.”

The dreary outlook and fears over similar frustrations at rival advertising-reliant companies dragged other tech stocks lower yesterday, sending Twitter, Facebook and Pinterest down by between 2pc and 6pc.

More than $100bn of market value was wiped off tech stocks on Friday.

Meanwhile, shares in plant-based burger company Beyond Meat sank by more than a tenth after it warned on third-quarter revenues.

Beyond had already been expecting sales to fall compared with the previous quarter but said they had slipped faster than it anticipated, partly due to the spread of the Delta variant across the US.

Beyond Meat sells to restaurants as well as supermarkets. Hospitality outlets had accounted for the majority of its sales before Covid but that situation was reversed by the pandemic last year.

The company said it also took a hit from “observed delays in distribution expansion and shelf resets” amid ongoing labour shortages.