It was another night of wild moves overnight (our time) on US markets. Sure, we didn't see the kind of savage falls that have recently come to define the US markets. But we still saw a bevvy of US shares, particularly US tech shares, continue to bounce around. Apple Inc (NASDAQ: AAPL) was up, as was Tesla Inc (NASDAQ: TSLA), while Amazon.com Inc (NASDAQ: AMZN) dropped.
But looking at after-hours trading, a very different picture emerges. Instead of a 4% rise, Apple was down 1.34%. Tesla went from a 1.66% rise to a 2.65% fall. And Meta Platforms Inc (NASDAQ: FB), the company formerly known as Facebook, went from a 1.4% gain to a loss of 7.1%. So what happened after hours that caused such a dramatic turnaround?
Well, it appears to be the fortunes of Snap Inc (NYSE: SNAP), the social media company behind Snapchat, that seems to be the catalyst here.
Snap share price plunge makes for a less than pretty picture for the Nasdaq
Snap stock suffered a nasty fall of 3.4% to US$22.47 a share yesterday during normal trading, but plunged by almost 31% in after-hours trading to US$15.51 a share. That represents the lowest level Snap shares have been at since April 2020.
This after-hours plunge in Snap's value seems to have been sparked by an SEC (US Securities and Exchange Commission) filing. The filing stated the following:
Since we issued guidance on April 21, 2022, the macroeconomic environment has deteriorated further and faster than anticipated. As a result, we believe it is likely that we will report revenue and adjusted EBITDA below the low end of our Q2 2022 guidance range.
We remain excited about the long-term opportunity to grow our business. Our community continues to grow, and we continue to see strong engagement across Snapchat, and continue to see significant opportunities to grow our average revenue per user over the long term.
According to reporting from CNBC, Snap CEO Evan Spiegel also sent a note to employees. Here's some of what that reportedly said:
Today we filed an 8-K, sharing that the macro environment has deteriorated further and faster than we anticipated when we issued our quarterly guidance last month… As a result, while our revenue continues to grow year-over-year, it is growing more slowly than we expected at this time.
Nasdaq heading for a nasty Tuesday
This was clearly the last thing the markets wanted to hear at this time. Snap's after-hours plunge looks to have taken the wind out of many other US tech shares' sails. Companies in Snap's space, such as Meta, Twitter Inc (NYSE: TWTR) and Pinterest Inc (NYSE: PINS) were hit the hardest. Indeed, most US tech shares that finished last night's session in the green subsequently went red in after-hours trading.
According to Bloomberg, futures for the Nasdaq 100 are now pointing to a drop of 1.3% for the tech-heavy Nasdaq. Although Snap isn't a Nasdaq share, many other US tech shares are. So it seems we have the Snap share price to thank for what is shaping up to be anther painful session of trading on the Nasdaq tonight.
