Strong earnings reports from Snap and Pinterest saw both companies soar after initially spiraling following Facebook’s torrid Q4 report.
Feb. 4, 2022
What a difference a day makes, eh? Only yesterday we were staring down the barrel of Facebook’s landmark Q4 earnings report. A first-time miss on user numbers sent the stock spiraling, losing $230 billion in a day in what is the biggest one-day loss in the history of Wall Street.
Snap (NYSE: SNAP), Pinterest (NYSE: PINS), and other social media stocks got dragged down with it…until they didn’t.
Not Facebook’s town anymore
Facebook’s fortunes sending ripples across the social media world isn’t a new phenomenon. For years, smaller platforms have been inextricably linked to the performance of Zuckerberg and co. in a largely one-way relationship. Now, however, cracks are beginning to show in Facebook’s foundations.
Snap plunged by over 22% following Facebook’s earnings, while Pinterest dropped by 9.5%. Fortunately, both companies had an opportunity to show their strength, with respective earnings calls scheduled for late yesterday evening — and they both definitely delivered.
Snap reported its first-ever profitable quarter as a public company to send its stock soaring by as much as 62% at one point! It’s now settled at around 50% in pre-market in what’s been a crazy two days for the company.
Pinterest, while not as volatile as Snap, rose by 25% at one point before settling closer to the 15% mark. It beat estimates for both earnings and revenue and predicted strong continued growth across the first quarter.
All of this leaves me wondering, where did it all go so wrong for Facebook? Each of these companies is effectively dealing with the same issues: supply chain problems, increased competition from companies like TikTok, and Apple’s world-changing privacy updates. Snap and Pinterest seem to be soaring, yet the world’s largest social media platform just can’t seem to keep up.
Has Facebook’s time finally expired? Maybe not. But something definitely needs to change.