Published on 27 Jul 2022 on Insider Monkey via Yahoo Finance
These 10 Social Media Stocks Are Getting Hammered
In this article, we will discuss 10 social media stocks getting hammered. To take a look at some more stocks under pressure, go to These 5 Social Media Stocks Are Getting Hammered.
In 2022, investors are preparing themselves for the slowest growth in revenue for the social media sector ever since its emergence. According to Bloomberg, the US social media companies lost $130 billion of their market value on July 22 following disappointing quarterly results by media companies like Snap Inc. (NASDAQ:SNAP) and Twitter, Inc. (NASDAQ:TWTR).
The social media sector had a sensational 2021 as the ad sales revenue of social media companies increased by 36% YoY to $58 billion. Brands raised their marketing outlay to reach more customers as the US economy staged a recovery from the COVID-19 pandemic. However, the dynamics are changing in 2022 as inflation has risen to a multi-decade high, and the probability of a recession has caused brands to lower their marketing spending to control costs. The Global X Social Media ETF (SOCL), which includes a group of social media stocks, had declined over 30% as of June 6. In addition to dealing with increasing interest rates and inflation, some advertisers are now having to rearrange their advertising budget due to labor constraints and supply chain interruptions. According to RBC Capital Markets, a significant decline in ad expenditure is expected in the digital sector, which would continue to pressure social media stocks’ prices.