In after-hours trading, shares of Facebook and Twitter, and other social media and digital advertising companies are sharply lower after Snap reported that it missed revenue expectations in the third quarter due to disruptions in its advertising business caused by Apple’s iPhone privacy changes. Snap also cautioned that supply chain interruptions were restricting short-term advertising investment because companies didn’t want to stoke demand for products they didn’t have in stock.
After hours, Facebook and Twitter both fell by as much as 6% and 5%, respectively, while Alphabet, the parent company of Google, and Pinterest also fell by more than 2%. (Pinterest also fell more than 2% during regular trade on Wednesday, on rumors that PayPal was considering an acquisition.) Next week, Facebook, Alphabet, and Twitter are expected to release profits. Companies that use customer data for digital advertising were also impacted.
Snap CEO Evan Spiegel said, “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.”Supply chain disruptions and staffing constraints, according to Spiegel, limited Snap’s “short-term willingness to drive extra customer demand through advertising,” causing the company to issue worse Q4 guidance than investors expected.