Investors in social media company Snap are reeling this afternoon as the stock has endured a bit of a meltdown following its release of Q2 earnings yesterday. The stock price is down nearly 40% for the day, at the time of writing, as investors rejigger their expectations for the future performance of the stock.
After closing just below $16.50 yesterday, their stock is now hovering below $10. The stock has dropped nearly 90% from its all-time-high of $83.34 in September of last year, erasing tens of billions in market cap value and falling harder than embattled, volatile cryptocurrencies like Bitcoin.
How did Snap manage to spook investors so severely? As we reported yesterday, the company not only missed revenue forecasts but declined to give guidance on future quarters due to “uncertainties related to the operating environment.”
Snap was riding high last year, enjoying an earnings multiple that many analysts viewed as unsustainable, but others saw as a signal of high expectations for the company relative to its competitors.
Plenty of tech stock have taken massive stock price haircuts amid a wider selloff in tech stocks, but Snap has now fallen much deeper percentage-wise than its fellow social media companies including Twitter and Meta.