Finimize - 😞 Snap can't keep up with TikTok

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Today's big stories

Snap reported disappointing quarterly results, and investors sent its shares plunging
Our analyst has spotted DeFi tokens that have more than doubled in value since June, and they might be bargains in the long run – Read Now
American Express reported impressive quarterly results as its customers took to the skies

Losing Streak

What’s Going On Here?

Snap reported worse-than-expected quarterly results late last week.

What Does This Mean?

Snap lowered expectations back in May by warning it would miss both its initial revenue and profit growth estimates for the quarter. Just as well: the company’s results were even worse than analysts’ revised expectations. That’s mainly down to Snap’s flailing online advertising business: demand waned as customers cut their marketing budgets, and fierce competition – we’re looking at you, TikTok – stole those that were spending. On top of that, Apple’s iOS privacy updates have been making it harder to roll out targeted campaigns. Snap’s overall revenue grew just 13% in the end, short of the 16% analysts were expecting. Things aren’t looking up, either: the company said revenue has yet to grow this quarter from the same time last year, and that it’ll continue to slow down any hiring in a bid to cut costs.

Why Should I Care?

For markets: Misery, meet company.
Not even Snap’s new share buyback program could appease investors: they still sent the company’s shares down 25% after the update, meaning its stock has lost about 75% of its value this year. But it didn’t stop there: investors also sent Meta and Alphabet’s stock down 5% and 3% respectively after Snap’s update, likely because they’re wary the same trend will show up in other ad-reliant companies when they report results in the coming week.

Zooming out: When in doubt, sue.
Those investors might be onto something: Twitter reported disappointing quarterly results across revenue, profit, and user growth on Friday. The company chalked some of that up to lagging advertising spending, but also blamed Elon Musk’s fluctuating interest in buying Twitter – and the resulting uncertainty – for the slump (tweet this). No wonder Twitter wants to put an end to that: the social media giant’s set to take Musk to trial this October over his attempt to pull out of the deal.

You might also like: Elon Musk has a “super bad feeling” about the economy. Here’s why you shouldn’t.

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Analyst Take

The DeFi Projects Turning The Crash Into Cash

By Jonathan Hobbs, Analyst

This year’s crypto sell-off might have spelled the end for many DeFi projects.

But when the entire crypto market is on the ropes, it makes sense to stick with the strongest contenders in each sector.

And it just so happens that two blue chip DeFi plays have been growing their fundamentals from strength to strength recently.

It seems their hard work is now paying off, with their tokens more than doubling in value since June.

So that’s today’s insight: how their shrewd positioning might still make them bargains in the long run.

Read or listen to the Insight here

The bear is here

Today’s tumbling markets might make you want to hold out and wait for more promising signs.

But there might be another way to deal with them: The Motley Fool believes you could use the bear market to your advantage, since you might be able to pick up some major stocks for cheap.

Motley isn’t alone: billionaire investor Rob Baron called the bear market a “huge, monstrous opportunity”, while Wedbush Securities’ Dan Ives described it as a “generational buying opportunity”.

So if you believe the market will eventually return to – or surpass – its highs, then you might want to explore The Motley Fool’s latest bear market stock picks.

And as luck would have it, you can check them out right here.

Read The Report