Snap shares soar more than 20% then turn around
The social media company had a storming reaction to Q3 earnings, beating expectations on both earnings and revenue and showing a rise in average revenue per user.
Then it all fell apart as some advertisers had paused spending following the onset of the war in the Middle East.
(AI Video Transcript)
Snap
Snap, the company behind Snapchat, had an amazing day of trading after they announced their earnings for the third quarter. The stock price went up by almost 25 percent at one point! This happened because Snap did even better than people expected - they made a profit of 2 cents per share instead of losing 4 cents like everyone thought they would. And their revenue (that's the money they made) was about $1.2 billion, which is more than the $1.1 billion that people were guessing. On top of that, the number of people who use Snapchat every day was higher than expected - 406 million instead of 405 million. And the money that Snap made from each of those users was also higher than predicted - $2.93 instead of $2.74.
How the war in Gaza might affect Snap's business
Snap did so well because its sales went up by 5 percent from last year. This means they were able to make more money. But later on, the stock price went down by 2.5 percent. Why did this happen? Well, people got worried about how the war in Gaza might affect Snap's business. Snap didn't give any official guidance for the next quarter because they said the war made it too unpredictable. Investors got worried that companies might stop spending money on ads, and that would hurt Snap. So, they started selling their Snap stock. But don't worry, it's still expected that the stock price will go up when trading starts again, just not as much as it did before.
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