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Social media stocks take a dive

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Last Week’s Highlights

Social media stocks disliked

Social media stocks fell on Friday after the owner of Twitter and Snapchat reported that advertisers had adjusted their spending in response to the current landscape. Rising interest rates, rising inflation, labor shortages and supply chain disruptions are among the main drivers of this reduction in spending. “If you want proof that companies are nervous about the economic outlook, just look at how media platforms and marketing agencies are lamenting a tougher advertising market,” said Russ Mould, chief investment officer at AJ Bell. Meta Platforms’ stock was down 5.6%, Alphabet Inc lost 3.3%, Pinterest fell 11.3% and Snapchat plunged 36.4%.

Tesla looks to boost liquidity

According to Tesla’s second quarter earnings report, the company divested 75% of its Bitcoin ownership to increase its liquidity position. The electric vehicle maker stated that they converted that percentage into fiat currency “Conversions in the second quarter added $936 million of cash to our balance sheet,” they said. Tesla’s digital assets were reduced to $218 million compared to the $1.26 billion they had in the first quarter of 2022; however, Elon Musk assured that the company is still not selling “any” of the Dogecoin they have at their disposal. Several specialists give Tesla’s stock a “moderate buy” rating.

Coming Up This Week

Spotify looking to expand boundaries

Spotify will present its results for the second quarter of the year on July 27. Despite having low expectations with the figures, it is worth noting that the company has beaten profit estimates in the last five quarters. Spotify is also looking at ways to expand its boundaries. Lately, the inclusion in the podcast market was a big step and has been a differentiating factor. The music streaming platform must continue to spend if it wants to defend its territory from competition like Apple with Apple Music. The audiobook business is one that can benefit Spotify because according to Maru Group, approximately 13% of US adults subscribe to an audiobook service. If the company enters new markets, its stock is likely to benefit.

Chip shortage is easing

Manufacturers such as Hyundai Motor Co and Electrolux believe the shortage of semiconductor chips is easing. The increase in chips will help companies take a problem off their hands when they are already battling raw material price inflation, rising interest rates and low consumer demand. The easing global chip shortage favored Hyundai to resume overtime and weekend shifts at its US plants. Vehicle production for the second half of the year is expected to increase. Similarly, Volkswagen predicted that the second half of 2022 is going to be strong for the company and forecast to catch up with its strongest rival, Tesla.

MARKET NEWS

US stocks closed lower on Friday as shares of social networking and ad tech companies fell. Snapchat had the weakest quarterly sales growth in its history as a public company so its stock fell about 40%. Meanwhile, tech giants Meta Platforms Inc and Alphabet Inc suffered declines of 7.6% and 5.6%, respectively.

The session closed with declines in the main indexes. The Dow Jones fell 0.4%, the S&P 500 lost 0.93% and the Nasdaq Composite dropped 1.87%. Despite Friday’s negative numbers, all three major indexes posted weekly gains. The Nasdaq closed the week up 3.3%, the S&P 500 gained 2.4% and the Dow Jones rose 2%.
Walmart will soon become a dividend king.

More Things to Sip On…

Google fires an engineer who claimed its AI chatbot is sentient.
Facebook’s growth woes in India.
IBM stock down 6.6% after earnings.

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