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.
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.
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.