Snap Inc shares sank more than 30% and hit their lowest since the pandemic, after the company’s forecast of zero revenue growth pointed to more pain ahead for a social media sector heavily dependant on digital advertising.

Facebook-parent Meta Platform Inc and Pinterest Inc fell between 2% and 7%. Twitter Inc slid 3%, also dragged by fears of security reviews of billionaire Elon Musk‘s takeover bid.

Analysts rushed to cut their price target on Snap, with Morgan Stanley taking it to a Wall Street low of $7. In early trading the stock hit its lowest since early 2019.

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The digital ad space has suffered as brands have cut marketing and ad budgets in response to declining consumer demand. Snap’s warning exacerbated those fears.

“This truly is a cautionary tale … advertisers might show that we’re already in a recession because of their unwillingness to spend on these smaller platforms,” said Bokeh Capital Partners’ Kim Forrest.

So far this year, digital ad companies have together lost roughly $1 trillion in value, hit by intense competition from TikTok and challenges from Apple Inc’s privacy changes to its iOS platform that allows users to opt out of data tracking.

Snap reported its slowest revenue growth as a public company for the latest quarter on Thursday, and forecast no revenue growth for the typically busy holiday quarter.

SNAP’S WOES

Advertisers have relied on Snap’s platform to tap into its popularity among teens and young adults.

But Apple’s privacy changes have made it more difficult to track and measure ads on Snapchat, causing major brands to shift their ad spending to bigger platforms that reach more people.

“A challenged macro continues to see ad buyers prioritize their larger, core platforms, namely Google and Meta, as they monitor consumer health,” Bernstein analyst Mark Shmulik said, adding that ad buyers reducing their spend particularly on smaller experimental platforms.

Snap’s stock has lost about 77% of its value so far this year, while Alphabet, Meta and Pinterest have lost between 30% and 60%. Twitter, however, has gained 21% on the prospect of billionaire Musk buying the company.

“We now believe that Snap will have difficulty remaining under control of its own destiny over the next six to nine months,” MKM Partners analyst Rohit Kulkarni said.

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