Snap stock plunged up to 16.9% Wednesday after the company warned that looming changes to U.S. trade rules could hurt advertising revenues โ even as it posted a 14% increase in total revenue.
๐น What Happened:
- Q1 Revenue: $1.36 billion, up 14% YoY
- Ad Revenue: $1.21 billion, up 9% YoY
- Q2 Guidance Withdrawn: Due to macro uncertainty
๐น The Trade Trigger: Snap cited concerns about the end of the de minimis exemption, a rule that lets goods under $800 enter the U.S. duty-free โ heavily used by Chinese e-commerce giants like Shein and Temu (who’ve already raised prices by 377% and 150%).
Snap CFO Derek Andersen said:
โWeโve heard from a subset of advertisers that their spending has been impacted by the changes.โ
๐น Market Impact:
- Snap closed down 12.43% after falling as much as 16.9%
- Meta fell <1%, Microsoft rose 0.31% and jumped 5%+ after hours
๐น Analyst Reaction:
โSnap has been pressured more than peers in prior macro downturns,โ said BofAโs Justin Post, reiterating a neutral rating despite the stock nearing historical lows.