Social media conglomerate Snap is experiencing a meltdown due to poor Q2 earnings. The stock price is down nearly 40% for the day. Investors are currently skeptical about the company’s future performance.
After closing just below $16.50 yesterday, their stock is now hovering below $10. The stock dropped nearly 90% from its all-time high of $83.34 in September of last year.
This has wiped out billions in market cap value which makes the stock highly volatile and risky due to the nature of the swings.
What made matters worse was that there wasn’t much to draw from the earnings call, investors never got an idea of the overall future prospect of the company.
Even though the tech market is experiencing a downturn and the possibility that we are actually in a recession is high, investors expected Snap to show some level of resilience.
Instead, the stock is performing extremely badly on the market and it will most likely get worse as investors might want to bet their money on a much safer company.
It will be interesting to see how stock develops over time as rivals such as TikTok and Instagram are investing heavily in their platforms and are outright fierce rivals at the moment. The fact that Snap is not considered in this “battle” is a problem.
