Snap's profit miss chills ad group share prices

S4 Capital and Meta among stock market fallers.

Snapchat recently launched a dedicated space for shopping called Dress Up.
Snapchat recently launched a dedicated space for shopping called Dress Up.

The stock market has punished Snap for a disappointing Q1 performance, sending its share price down by nearly half on Tuesday.

The Snapchat owner’s lower-than-expected profits have prompted fears of an advertising slowdown in the U.S. and possibly beyond.

Analysts at Barclays wrote: “The debate is whether Snap's weakness, which logically should be earlier than other media owners as they are more exposed to experimental display budgets, will come to other advertising-exposed stocks. Our answer is that it is likely.”

Their peers at Jefferies added: "Snap's pre-announcement of Q2 year-on-on-year revenue growth likely below the initial 20% to 25% guide is indicative of a rapidly deteriorating macro environment that will likely impact the whole ad industry."

Other companies’ share prices lurched downwards after Snap’s update, including Meta, Omnicom Group, Interpublic Group and Google in the U.S.

In the U.K., WPP closed at a 14-month low on Tuesday but was back up slightly on Wednesday, while digitally focused S4 Capital sank to a 22-month low on Wednesday.

M&C Saatchi has also cooled slightly, opening around 210p, down around 5% from the highs it hit after news of a recommended 247.2p per share takeover approach from Next 15 on Friday morning.

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