Snapchat is tearing down Wall Street
Investors are punishing Snapchat: after the tech group had to adjust its forecast downwards again, the stock is in free fall. This is taking a toll on Wall Street as a whole.
Due to bad news from the social media industry, the US stock markets largely gave up their gains of the previous day on Tuesday. Bad mood was spread above all by Snap’s cash-strapped forecast, which dragged down large parts of the industry.
The company’s stock, which includes the messenger service Snapchat, fell at times by more than 40 percent on Tuesday. It is likely that the targets for sales and operating profit will be missed, the company Snap previously announced. Since the forecast a month ago, the economic environment has deteriorated further – and faster than expected. The news from the Snapchat group once again fueled concerns about risks around economic growth.
“All in all, we believe the headwinds for Snap are coming from many directions,” writes analyst Doug Anmuth at bank JPMorgan. He assumes that the cautious tenor of the Group also carries downside risks for other values from the online industry.
Against this background, the leading Dow Jones Industrial index fell by 1.31 percent to 31,463.94 points in early trading. The day before, it had increased by almost 2 percent. The losses were more pronounced in the market-wide S&P 500, which fell 2.12 percent to 3,889.44. The tech-heavy Nasdaq 100 slipped 3.28 percent to 11,639.27.