One unwelcome word, number, or warning can send tech stocks tumbling in record time with so many uncertainties about the economy. Investors seem to be watching for any sign that would confirm their fears that the economy is overheating and that a recession is on the horizon.
One of these signals came on May 23 from the social network Snap Inc (SNAP) – Get Snap, Inc. Class A Report. The firm warned that revenue and adjusted Ebitda would come in below the low end of its guidance.
“Since we issued guidance on April 21, 2022, the macroeconomic environment has deteriorated further and faster than anticipated,” causing companies to pull back on ad spending as they reevaluate priorities in a weakening economy, the San Francisco-based company explained.
Snap chief financial officer Derek Andersen noted that the “operating environment could be even more challenging going forward. More specifically, the headwinds that impacted our business in Q1 have persisted into Q2, and we believe the impact of the war on Ukraine has been significant, and this impact is particularly difficult to predict going forward.”