- pinterest (NYSE:PINS) the stock plunges today after its rival Instantaneous (NYSE:INSTANTANEOUS) issued a revenue warning
- Today’s drop worsens the situation for Pinterest shares, which were already down nearly 40% on the year.
- Snap’s profit warning fueled fears of a possible US recession
pinterest (NYSE:PINS) the stock plunges 25% today after Instantaneous (NYSE:INSTANTANEOUS) issued a profit warning.
In morning trading, PINS stock is down 25%, worsening an already bad situation for shareholders of the social media company. Prior to today, Pinterest’s stock was down nearly 40% year-to-date.
Pinterest is one of several social media companies whose share price is battered today after Snap, the operator of social media platform Snapchat, said it was unlikely to it hit its second-quarter earnings estimate due to deteriorating macroeconomic conditions and a drop in advertising revenue. . This news spooked investors who consequently sold shares on social networks.
What happened with stock PINS
In a regulatory filing with the U.S. Securities and Exchange Commission (SEC), Snap warned it was at risk of missing its own second-quarter adjusted revenue and profit targets. Snap also said it plans to reduce the number of new employees it hires this year.
In a note to staff, Snap CEO Evan Spiegel said: “We believe it is now likely that we will report revenue and Adjusted EBITDA below the lower end of the guidance range we have provided. for this quarter.”
Spiegel also said Snap plans to reduce its hiring this year to about 500 new employees, from more than 2,000 employees hired in 2021. SNAP stock is down more than 40% today.
why is it important
Snap’s profit warning and hiring cuts are sending shockwaves through other social media actions, including PINS’s actions. While Pinterest’s stock price is down 25%, Metaplatforms (NASDAQ:Facebook) the stock is down 9% and from Twitter (NYSE:TWTR) the stock price is down almost 5%.
Snap’s warning spooked already nervous investors worried about slowing growth. The news that macroeconomic conditions are hurting Snap is also fueling fears that the US economy could slide into recession as the Federal Reserve aggressively raises interest rates.
What’s next for Pinterest
PINS stock drops sharply today as the entire social media sector is reduced with SNAP stock. Investors and analysts are treating Snap’s earnings warning and decelerating growth as a sign of tough times ahead for the economy and markets. With investor sentiment already low, Snap’s earnings warning made a bad situation worse.
As of the date of publication, Joel Baglole had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.