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YouTube-parent Alphabet Inc, Facebook-parent Meta Platform Inc,
Pinterest Inc and Twitter Inc all slid between 1.7% and 9.2% in
premarket trade.
"We believe Snap is facing increased competition, primarily from
TikTok, both for time spent and increasingly for ad dollars,
which is compounding the challenges of a softer macro and
Apple's (privacy-related) changes," Atlantic Equities analysts
said in a note.
The brokerage said competition is likely to continue to increase
in 2023.
Snap, on Thursday, reported its slowest revenue growth as a
public company for the latest quarter and forecast no revenue
growth in the typically busy holiday quarter, while Wall Street
analysts were expecting a 3.3% rise, according to Refinitiv
data.
The company had said in August it would lay off 20% of its
employees and discontinue projects such as gaming and a flying
camera drone to cut costs and brace for a deteriorating economy.
"Given SNAP had been growing headcount over 30% y/y for 4
straight quarters, we wonder if the company can execute on its
lofty growth objectives with a 20% smaller employee base,"
Jefferies analysts said in a note.
Snap's stock, now trading at $8.06, has lost about 77% of its
value so far this year, while Alphabet, Meta and Pinterest have
lost between 30% and 60%. Twitter, however, has gained 21% on
the prospect of billionaire Elon Musk buying the company.
(Reporting by Akash Sriram in Bengaluru; Editing by Savio
D'Souza)
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