Despite hope from a rebound earlier this week, stocks fell again Tuesday.
Trish Regan predicted this on her podcast saying, “investors should not be fooled by Monday’s rally…there’s more pain to come.”
Turns out, she was right.
A record drop of Snap Inc. led to a decline in other tech stocks.
Snap CEO Evan Spiegel lowered the company’s forecast, which led to the decline. He pointed to the effects of inflation, something a lot of companies are struggling to combat.
“How do you pass these costs on to consumers?” Trish Regan asked on her podcast. “Consumers who are already trading down, not going for the brand names…things are getting a lot tighter because there is so much inflation.”
Snap’s revenues have increased 990% since its IPO ($404 million to $4.4 billion).
Meanwhile, the stock is down 48% over that time.
How is that possible?
It was trading at 64x sales at its IPO and <5x sales today. Lesson: when growth slows, valuation suddenly seems to matter. pic.twitter.com/MYNJkz86Ue
— Charlie Bilello (@charliebilello) May 25, 2022