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The fall in the SNAP stock price has also pulled down the shares of other social media companies including Facebook and Twitter.
The shares of American camera and social media company Snap Inc (NYSE: SNAP) is crumbling in the Pre-Market where it is down by 20.54% as the company’s third-quarter revenue fell short of Wall Street estimates.
“While we anticipated some degree of business disruption, the new Apple-provided measurement solution did not scale as we had expected, making it more difficult for our advertising partners to measure and manage their ad campaigns for iOS,” Snap CEO Evan Spiegel said in his prepared remarks.
The company’s Earnings Per Share (EPS) came in at 17 cents for the quarter and it’s higher than the 8 cents projected by Refinitiv analysts. While Snap’s global daily active users (DAUs) came in at 306 million for the quarter and higher than the projected 301.8 million per StreetAccount, the average revenue per user (ARPU) of $3.49 fell short of the StreetAccount estimate of $3.67.
Despite the Apple policy revamp, and other factors including global supply chain strain and labor shortages, Snap CFO Derek Andersen said he expects the firm’s Q4 revenue to fall in between the $1.16 billion and $1.20 billion range.
“Unfortunately, these changes are occurring during a season when our advertising partners would normally expect their supply chains to be operating at peak capacity, and at a time when we would otherwise expect peak advertising demand to drive peak contestation, and therefore peak pricing, in our auction,” Andersen said in his prepared remarks.
Hope for SNAP Shares Recovery
Despite the 20.54% fall in the SNAP stock price to $59.68, Spiegel foresees confidence in the company’s future performance.
“While it is difficult to predict the trajectory of these challenges, the growth of our audience, the adoption of our new products and platforms by our community, and the underlying efficacy of our advertising products for performance advertisers gives us confidence in the future of our business and our ability to navigate this environment as we continue to invest in our long-term vision,” Spiegel said.
The fall in the SNAP stock price has also pulled down the shares of other social media companies including Facebook Inc (NASDAQ: FB) and Twitter Inc (NYSE: TWTR). While the former is down by 3.57% in the pre-market, the latter plunged by 2.87% to $63.52 per share.
Amongst the visible forecasts the company has is the expectations for its DAUs to reach between 316 million and 318 million in the fourth quarter. These estimates are conservative when compared to the expectations from analysts. However, the achievement of its projections will contribute toward sustaining the company’s future share growth and thus work in the firm’s overall share recovery.