For the third time in as many quarters, disappointing results from Snap are roiling social media stocks and adding to signs that the economic slowdown is deepening.
Shares of Snap plunged 27% in late trading, with the selloff spreading to peers including Meta, Alphabet and Pinterest.
The companies were set to lose a combined market value of about $29 billion.
US and Asian markets continued their downward trend, as the S&P 500 dropped 0.8% and the Nasdaq closed 0.6% lower.
The Nikkei 225 is down 0.4% in early morning trade, while the Hang Seng is down 0.6%.
In local news, Orion Minerals secured a R250 million funding package with the Industrial Development Corporation (IDC) to fund early works at Prieska Copper-Zinc Mine
Meanwhile, Spear REIT reports a healthy increase in income of 6% with a distributable income per share (DIPS) of R0.41.
Here is the biggest news of the day.
- Orion Minerals secured a R250 million funding package with the Industrial Development Corporation (IDC) to fund early works at Prieska Copper-Zinc Mine. The IDC will provide R250 million as a senior secured, convertible debt facility. The loan and capitalized interest may be converted into shares in Orion’s holding company for Prieska Copper-Zinc Mine (PCZM), based on a pre-money valuation of R1.2 billion for PCZM. The proceeds will be applied to mine dewatering and trial mining operations in order to complete the previously announced Early Production Plan for PCZM.
- Spear REIT reported a healthy increase in income for its interim results. Distributable income per share (DIPS) increased 6.1% to R0.41. The distribution per share increased 12.3% to R0.37 based on a 90% pay-out ratio. The group boasts a 93.5% portfolio occupancy rate while their investment property value stands at R4.48 billion.
- Snap(chat) fell more than 25% in after-hours trading following a 400% surge in net losses. The stock was severely punished despite revenue of $1.13 billion, only barely missing expectations of $1.14 billion. Revenue still managed to grow 6% from the previous year, although it is the first time growth has slowed to single digits. A net loss of $360 million was reported, partly due to a $155 million restructuring charge involving laying off 20% of the company’s employees. The company’s board authorized a stock repurchase program of up to $500 million.
- Raubex expects a good increase in earnings. The company published a trading statement expecting earnings per share to grow between 10% and 20% to around R1.60. The group’s interim results are due on 7 November.
- UK Prime Minister Liz Truss has resigned after only 44 days in office, following a failed budget with proposed unfunded tax cuts that contributed to market turmoil in the UK bond market.
- Japan’s inflation rate hits 8-year high. Core consumer inflation reached 3.0% year-over-year, exceeding the central bank’s 2% target for the sixth straight month and reaching the highest level in 8 years. The broadening price pressures in Japan, the selloff in Japanese bonds, and the yen’s tumble below the key psychological barrier of 150 to the dollar will put pressure on the Bank of Japan to change its current dovish policy.