Meta’s shares fell 10% this week, wiping out $53 billion in market value.
This comes just after Snap, which operates social media platform Snapchat, warned about its second quarter earnings.
“Like many companies, we continue to face rising inflation and interest rates, supply chain shortages and labor disruptions, platform policy changes, the impact of the war in Ukraine, and more,” Evan Spiegel, CEO of Snap, said in a memo to staff.
In comparison, Snap’s shares fell by over 40%, followed by Pinterest falling by 27%, Alphabet by 8%, and Twitter by 4%. Altogether, it appears that the social media industry is feeling the brunt of the economic slowdown.
However, analysts worry that these losses will not be exclusive to just social media giants — it could have a rippling effect on the economy as a whole.
Despite several experts offering a grim premonition of the next two years, JPMorgan CEO Jamie Dimon recently told investors that although an economic slowdown may be inevitable, it may clear out before turning into a full-blown recession.
Snap’s warning sends a clear message to its peers within the social media industry, but it also indicates that consumer preferences are evolving, and that innovation might be the solution to stay ahead of the competition.