Today is Tuesday, May 24, 2022.
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Snapchat’s Grim Warning
Shares of Snap (NYSE: SNAP), the parent of Snapchat, dropped 30.97% in after-hours trading on Monday after the social media platform posted a financial update.
Details: In a filing with the SEC, Snap wrote that “the macroeconomic environment has deteriorated further and faster than anticipated” since the company issued financial results on April 21. The company now expects revenue and adjusted EBITDA to be below its previous guidance range.
Slow: In a memo to employees obtained by The Verge on Monday, Snap CEO Evan Spiegel told employees that the company will slow its pace of hiring and evaluate its budget due to rising inflation and interest rates. Spiegel also blamed supply chain and labor challenges, plus platform policy changes and the war in Europe.
Sympathy Pains: The news sent other social media stocks down during after-hours trading on Monday, including Twitter (Nasdaq: TWTR), which was down 3.72%, and Facebook’s parent Meta (Nasdaq: FB), which was down 7.09%.
Numbers: Shares of Snap are down 60% in the last 12 months.
Final Thoughts: Snap originally warned about these problems during its earnings in April. While the company’s financial situation is not good, user demand is still strong.
Notable Earnings Today: Best Buy (NYSE: BBY), Star Bulk Carriers (Nasdaq: SBLK), AutoZone (NYSE; AZO), Nordstrom (NYSE: JWN), Abercrombie & Fitch (NYSE: ANF), Intuit (Nasdaq: INTU), Ralph Lauren (NYSE: RL), Urban Outfitters (Nasdaq: URBN), Petco Health & Wellness (Nasdaq: WOOF), Agilent Technologies (NYSE: A), Canadian Solar (Nasdaq: CSIQ), Toll Brothers (NYSE: TOL), Diana Shipping (NYSE: DSX), NetEase (Nasdaq: NTES), Caleres (NYSE: CAL), Dole (NYSE: DOL), LiveRamp (NYSE: RAMP), Citi Trends (Nasdaq: CTRN), Elbit Systems (Nasdaq: ESLT), Zepp Health (NYSE: ZEPP).
Notable IPOs Today: SaverOne 2014 Ltd. (Nasdaq: SVRE), Brenmiller Energy Ltd. (Nasdaq: BNRG).
Notable Equity Crowdfunding Campaigns Ending Today: CoLabs Int’l (Dalmore Group), Eden Fresh Network (Honeycomb), True East Leaf (MainVest).
Notable Economic Events Today: Manufacturing PMI (9:45 a.m. ET), Markit Composite PMI (9:45 a.m. ET), Services PMI (9:45 a.m. ET), New Home Sales (10:00 a.m. ET).
Zoom’s Big Comeback
Shares of Zoom Video Communications (Nasdaq: ZM) jumped 4.84% in after-hours trading on Monday after the tech company posted positive earnings.
Financials: Zoom posted earnings per share of $1.03, which was better than expected. Revenue hit $1.07 billion, which was expected.
Outlook: The company expects total revenue in the second quarter to be between $1.115 billion and $1.120 billion and total revenue for the full year to be between $4.530 billion and $4.550 billion; both were better than expected.
The Good: The number of customers paying more than $100,000 in the last 12 months is up 46% year-over-year. Zoom had an operating margin of 37%.
The Bad: The number of enterprise customers is up 24% year-over-year, which is slightly lower than the previous quarter, suggesting a slight drop in growth.
Final Thoughts: Zoom’s stock is down 72% in the past 12 months. These results show that some stay-at-home stocks can still thrive in a post-pandemic world.
Why is the Stock Market Down in 2022?
What are the macroeconomic factors behind the stock market crash of 2022?
Global: Two very big problems have made investors nervous in 2022. The first is Russia’s invasion of Ukraine, which has resulted in a war in Europe. And China has installed a zero covid policy that has resulted in more lockdowns.
Economic: Supply chain challenges coupled with higher inflation have been awful for the market. Throw in rising interest rates and many investors feel trapped.
Final Thoughts: Although the causes of the 2022 stock market crash are obvious, investors are hoping that there is light at the end of this very dark tunnel.
Trend to Watch
Another One Bites the Dust: Airbnb to Quit China Business as Harsh Lockdowns, Competition Weigh on Demand (The Wall Street Journal)
The Hype is Real: 12% of US Adults Held Crypto in 2021 (CoinDesk)
Just What the Doctor Ordered: SeedInvest’s Largest Securities Offering Ever NowRX Closes at Over $29 Million (Crowdfund Insider)
Not Dead At All: Welcome to the Zombie Cryptocalypse (Wired)
Bullish: Bitcoin’s current setup creates an interesting risk-reward situation for bulls (Cointelegraph)
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