Snapchat parent Snap Inc.’s acknowledgement that its ad business was impacted by Apple Inc.’s iOS 14 privacy changes dragged stocks of other social media rivals such as Facebook Inc., Twitter Inc., Pinterest Inc., and Alphabet Inc.
Snap’s shares fell more than 21 percent in Thursday’s after-hours session after the company’s third-quarter revenue missed analysts’ estimates as its ad business was disrupted by changes to iOS ad tracking that were rolled out by Apple earlier this year.
Snap reported third-quarter revenues of $1.07 billion, up 57 percent year-over-year, but it missed analysts’ consensus estimate of $1.1 billion.
“While we anticipated some degree of business disruption, the new Apple provided measurement solution did not scale as we had expected, making it more difficult for our advertising partners to measure and manage their ad campaigns for iOS,” Snap CEO Evan Spiegel said during a conference call with analysts.
The CEO also warned that global supply chain issues and labor shortages were impacting its advertising partners.
Why It Matters
Shares of other social media companies such as Facebook and Twitter fell more than 4 percent and almost 5 percent respectively in after-hours trading following Snap’s disclosure.
Alphabet’s shares lost almost 2 percent and Pinterest’s shares tumbled almost 4 percent in the after-hours session.
It was reported on Monday, citing the Financial Times, that Apple’s advertising business has more than tripled its market share in the six months after it introduced the privacy changes that restrict rivals from targeting ads at consumers.
Facebook warned in July that it expects headwinds from Apple’s privacy changes to have a greater impact in its third-quarter compared to the second quarter.
Snap shares closed 0.7 percent lower in Thursday’s regular trading session at $75.11 and further fell almost 21.6 percent in the after-hours session to $58.90.
By Madhukumar Warrier
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