Social media stocks slip amid Musk, Snap news

Oct 21, 2022, 5:32 AM | Updated: Oct 25, 2022, 12:38 am
FILE - The Twitter logo is seen on a mobile phone, Oct. 14, 2022, in Boston. Social media platforms...

FILE - The Twitter logo is seen on a mobile phone, Oct. 14, 2022, in Boston. Social media platforms like Facebook, TikTok and Twitter say they're taking steps to prevent the spread of misinformation about voting and elections ahead of next month's midterm elections. Yet a look at some of the most popular platforms shows baseless claims about election fraud continue to flourish. (AP Photo/Michael Dwyer, File)

(AP Photo/Michael Dwyer, File)

Shares of social media companies tumbled Friday after a slew of news in the sector that concerned investors, including a report that Elon Musk may cut almost 75% of Twitter’s workforce and Snap’s muted fourth-quarter outlook.

Musk has told prospective investors in his Twitter purchase that he plans to cut nearly 75% of Twitter’s employee base of 7,500 workers, leaving the company with a skeleton crew, according to a Thursday report by The Washington Post.

Wedbush’s Dan Ives said in a client note that Twitter Inc. is due for some job cuts, but that the reported figure may not be the best approach.

“Musk cannot cut his way to growth with Twitter and a number in the 75% zip code would be way too aggressive in our opinion out of the gates,” he wrote.

A Delaware judge has given Musk and Twitter until Oct. 28 to work out details of the proposed $44 billion deal. Otherwise, there will be a trial in November.

Shares of Twitter fell $2.55, or almost 5%, to close Friday at $49.89.

Elsewhere in the sector, Snap Inc.’s stock slid more than 28% after the company behind Snapchat gave a lackluster forecast for the fourth quarter and its third-quarter revenue missed Wall Street’s view.

Snap reported third-quarter revenue of $1.13 billion, below the $1.15 billion that analysts polled by Zacks Investment Research expected.

While the Santa Monica, California-based company said in a letter to investors that it wasn’t giving a formal fourth-quarter outlook, it did say that it’s highly likely that year-over-year revenue growth will slow during the period. Snap said its internal forecasts are for year-over-year revenue growth to be about flat.

A JPMorgan analyst note said that Snap is experiencing weaker demand due to macro pressures, platform policy changes and competition.

“We appreciate management’s efforts to control what they can–cutting costs & doubling down on more resilient performance-based ads–but trends remain choppy, and the macro backdrop is likely even tougher into 2023,” the note said.

Adding to the mix are concerns about the way social media platforms are being used as the mid-term elections near. While platforms like Twitter, TikTok, Facebook and YouTube say they’ve expanded their work to detect and stop harmful claims that could suppress the vote or even lead to violent confrontations, a review of some of the sites shows they’re still playing catchup with 2020, when then-President Donald Trump’s lies about the election he lost to Joe Biden helped fuel an insurrection at the U.S. Capitol.

Shares of Meta Platforms Inc., parent company of Facebook, fell 1.2%.

The flurry of news weighed on others in the sector as well, including Pinterest Inc., which ended down 6.4%.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Protesters sing an anti-government song in front of a barricade of burning tires during a protest a...
Associated Press

US says it will expand, extend temporary status for Haitians

SAN DIEGO (AP) — The Biden administration said Monday that it would expand temporary legal status for Haitians already living in the United States, determining conditions in the Caribbean nation were too dangerous for their forced return. The Homeland Security Department said Haitians who were in the United States Nov. 6 could apply for Temporary […]
21 hours ago
Associated Press

Amnesty International Canada says it was hacked by Beijing

TORONTO (AP) — The Canadian branch of Amnesty International said Monday it was the target of a cyberattack sponsored by China. The human rights organization said it first detected the breach Oct. 5 and hired forensic investigators and cybersecurity experts to investigate. Ketty Nivyabandi, Secretary General of Amnesty International Canada, said the searches in their […]
21 hours ago
FILE - A TV screen shows a file image of North Korea's military exercise during a news program at t...
Associated Press

N. Korea orders new artillery firings over South’s drills

SEOUL, South Korea (AP) — North Korea’s military says it has ordered frontline units to conduct artillery firings into the sea for the second consecutive day in a tit-for-tat response to South Korean live-fire drills in an inland border region. The statement by the North Korean People’s Army’s General Staff came a day after the […]
21 hours ago
Fans of Brazil cheer their team after the World Cup round of 16 soccer match between Brazil and Sou...
Associated Press

World Cup betting down in Las Vegas but higher than expected

LAS VEGAS (AP) — The World Cup may be the globe’s biggest sporting event, yet in the United States in the fall, it competes with a full sports betting calendar. Las Vegas sportsbook directors weren’t overly optimistic the betting would be higher than the 2018 World Cup, which was played in the more usual summer […]
21 hours ago
FILE -  Kirstie Alley attends the premiere of HBO's "Girls" on Jan. 5, 2015, in New York.  Alley, a...
Associated Press

Kirstie Alley, Emmy-winning ‘Cheers’ star, dies at 71

LOS ANGELES (AP) — Kirstie Alley, a two-time Emmy winner whose roles on the TV megahit “Cheers” and in the “Look Who’s Talking” films made her one of the biggest stars in American comedy in the late 1980s and early 1990s, died Monday. She was 71. Alley died of cancer that was only recently discovered, […]
21 hours ago
FILE - Former President Donald Trump speaks at Mar-a-Lago Friday, Nov. 18, 2022, in Palm Beach, Fla...
Associated Press

What’s at stake as Trump Org. trial deliberations continue

NEW YORK (AP) — It’s one ballot former President Donald Trump would rather not be associated with: the verdict sheet at his company’s criminal tax fraud trial. Deliberations are set to spill into a second day Tuesday as jurors weigh charges that the Trump Organization helped executives dodge personal income taxes on perks such as […]
21 hours ago

Sponsored Articles

...
Quantum Fiber

How high-speed fiber internet edges out cable for everyday use

In a world where technology drives so much of our daily lives, a lack of high-speed internet can be a major issue.
(Photo via MLB's Arizona Fall League / Twitter)...
Arizona Fall League

Top prospects to watch at this year’s Arizona Fall League

One of the most exciting elements of the MLB offseason is the Arizona Fall League, which began its 30th season Monday.
...
Day & Night Air Conditioning, Heating and Plumbing

Here are 4 signs the HVAC unit needs to be replaced

Pool renovations and kitchen upgrades may seem enticing, but at the forefront of these investments arguably should be what residents use the most. In a state where summertime is sweltering, access to a functioning HVAC unit can be critical.
Social media stocks slip amid Musk, Snap news