Shares in Snapchat maker Snap fell off a cliff Thursday after the company announced its Q3 results. The company’s stock plunged 25% after hours, reports Reuters. The reason? Snap executives said the company was facing two threats: supply-chain issues and privacy changes Apple implemented on its iOS platform earlier this year. The supply-chain issues weren’t something Snap is necessarily facing directly, but they’re a problem because other companies that are up against the global supply-chain crisis were cutting back on advertising.
But the biggest issue that spooked investors was the second issue: Apple’s privacy changes to iOS.
Earlier this year Apple introduced a major privacy feature called App Tracking Transparency (ATT) that allowed users to choose to opt out of third-party app tracking. This means apps can no longer collect data about users from third parties and use that data to better target them with ads unless a user specifically gives the app permission to do so.
Apple’s ATT is one of the main reasons Snap missed revenue expectations. As Snap CEO Evan Spiegel noted, “while we anticipated some degree of business disruption, the new Apple-provided measurement solution did not scale as we had expected, making it more difficult for our advertising partners to measure and manage their ad campaigns for iOS.”
But Snap wasn’t the only company to see its stock take a major hit yesterday. Once Snap’s results were out, other tech giants that rely on advertising for much of their revenue saw their shares drop, reports CNBC. These include Twitter, Pinterest, Facebook, and Alphabet. But by far, Snap had the worst drop at 25% in after-hours trading. Things don’t look much better for the stock this morning. Though it’s recovered some of yesterday’s losses, Snap is still down over 20% in pre-market trading today.