Meta Platforms Inc. is leading the sharp turn lower in social-media stocks after the consumer price index unexpectedly moved higher during August, indicating that inflation remains rampant despite declines in gas prices relative to earlier in the summer.
The 7.6% drop in shares of the Facebook parent company Tuesday afternoon comes amid broader declines for U.S. stocks, and particularly tech names, with the Nasdaq Composite
down 481 points, or 3.9%.
and its social-media peers have been on a rocky ride this year amid concerns about the impacts of inflation and other economic challenges on advertiser activity. The company logged its first-ever year-over-year drop in revenue during the June quarter, with executives saying they expected broad effects on the advertising business and planned to cut costs given the climate.
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The stock ended at $155.85 on June 22 for its lowest close of 2022, and while shares traded below that level at times in Tuesday’s session, they’ve pared losses somewhat and recently changed hands at $156.32.
Shares of Meta have slid 54% over the course of 2022.
Other social-media names were falling sharply as well, including Snap Inc.
off 5.9%, and Pinterest Inc.
down 3.6%. Ad-dependent Alphabet Inc.
which runs the YouTube platform and the Google suite of services, has seen its shares decline 4.3%.
Despite jitters about the advertising industry, payment-technology companies have indicated that spending remains strong, even if consumer confidence is pressured.
“Consumer spending has been remarkably stable,” Visa Inc.’s
chief financial officer said at a Monday conference. Separately, Mastercard Inc.
released spending data showing 11.7% year-over-year growth in August retail sales exclusive of autos.
The social-media stock bucking Tuesday’s trends is Twitter Inc.
but that stock’s immediate future is less tied up in ad-industry dynamics given the company’s merger saga with Tesla Inc.
Chief Executive Elon Musk. Musk is seeking to terminate his $44 billion deal for the company and a judge will rule on the situation in October, but Twitter scored a win in its favor Tuesday as it said that shareholders had voted to approve the acquisition.
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Twitter must still take the matter to court, but investors seem to feel incrementally positive as Twitter shares are ahead 2.1% in Tuesday’s tough market action. Twitter is the second-best performer in the S&P 500
Tuesday, behind only chemical manufacturer Albemarle Corp.