All eyes on Snap after shock Thursday wiped 24 off share price

Snap shares fall 24% yesterday in after-hours trade as the social media group posted its outlook for Q4, citing Apple’s new privacy policies as a major challenge.

Snap, whose shares were up 52 per cent this year at Thursday’s market close, saw a dramatic drop in value within minutes of the announcement, wiping $28.5bn from its market value.

Snapchat warned that revenues in the forthcoming quarter would be between $1.16bn and $1.2bn, well below the consensus estimate of $1.4bn.

The new rules introduced earlier this year have made advertising more complex, requiring apps on Apple’s App Store to get explicit permission from users to track them for advertising purposes.

In a webcast hosted by Snap, Chief Executive Evan Spiegel described Apple’s privacy changes as a “frustrating setback” for the company, but reassured investors that he would prioritise rebuilding ad infrastructure.

Spiegel also cited the coronavirus pandemic as a key influence on results, describing the challenge of advertisers’ supply chain issues and labour shortages.

Echoing this point, Snap Chief Financial Officer Derek Andersen in a Snap webcast said: “We still expect these headwinds to continue to impact our business throughout Q4 as the adoption of new measurement solutions will take time.”

“It is still not clear what the longer term impact of the iOS platform changes may be, and this may not be clear until at least several months or more after the ecosystem stabilizes and advertisers are able to fully implement the new solutions we are developing.”