Yesterday, the broad market saw some hefty selling. 

One of yesterday’s biggest losers was Snap Inc. (NYSE: SNAP). Snap spooked investors with a less-than-ideal disclosure that its Q2 revenue and profit will be lower than expected. This sent shares into a complete freefall, SNAP closed lower by about 43%, brutal…

Snap’s earnings report also kicked off a debate regarding whether the social-media company’s troubles indicated a broader slowdown in the online-ad market.

Snap presented yesterday at an investment conference where its CEO Evan Spiegel said “the macroeconomic environment has definitely deteriorated further and faster than we expected.” 

A handful of financial analysts took the disappointing results as a flashing red sign that ad spending across the board is heading downwards. Conveniently, this coincides with the murmurs we see across financial media that we’re heading for a recession, and perhaps we’re already in one… 

One of the first things to go in a recession is advertising spending.

But as it goes, by the time major financial media outlets bang the table about recessions the broader economy is actually on its way out of a recession. 

Even outside of any talks about a recession, there are also plenty of other factors at play here… Inflation, supply-chain issues, shortages, and fears of a wider economic downturn all contribute to many companies' decision-making when it comes to ad spending.

Regardless of Snap’s Tuesday tumble, shares were able to climb about 10% today to claw back some of its losses.

To a bright future,

Ray Blanco
Chief Technology Expert, Technology Profits Daily
AskRay@StPaulResearch.com