Shares of Snapchat’s parent company tanked as much as 27 percent after the social media firm reported lower-than-expected revenue on Thursday, blaming the miss on changes Apple made to the iPhone’s privacy settings earlier this year.
“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,” Snap CEO Evan Spiegel said in prepared remarks.
Spiegel was referring to an update Apple rolled out in April that presents iPhone users with a pop-up any time they open a new app that asks if they want to be tracked and give them an opportunity to opt out.
That feature, called ATT, or App Tracking Transparency, threatens the viability of companies like Snapchat that rely on tracking users’ data to improve the effectiveness and profitability of targeted ads.
At least in part due to the Apple update, Snap reported sales of $1.07 billion, falling short of the $1.10 billion expected by analysts. The company also reported earnings per share of 17 cents, topping expectations of 8 cents.
Snap shares were last seen more than 20 percent lower, at $59.88 per share, in premarket trading.
And shares of other companies that rely on revenue from online advertising took a hit, too, as investors anticipated similar hits in upcoming earnings reports.
Shares of Facebook and Twitter both dropped as much as 6 percent and 5 percent after the bell Thursday, following the report from Snapchat.
Google parent company Alphabet’s stock fell more than 2 percent while shares of Pinterest — reportedly an acquisition target for financial-tech firm PayPal — dropped almost 3 percent.
Facebook, Twitter and Alphabet will all report earnings next week.
Online advertising firms took a hit, too, with shares of the Trade Desk and Magnite both down more than 4 percent in premarket trading Friday.
Pubmatic stock was almost 4 percent lower Friday morning.