Jeff Green, CEO of The Trade Desk.
Scott Mullin | CNBC
Stocks Trade desk It plummeted 39% on the worst record day on Friday after the ad tech company announced its CFO’s departure and analysts raised concerns about growing competition. Amazon.
Trade Desk, published in 2016, experienced a previous optimal drop when its stock fell 33% in February. In its second quarter revenue report late Thursday, the company beat its revenue and revenue expectations, but the results failed to impress investors.
Trade Desk, who specializes in delivering technology to businesses that want to target users across the web, said Laura Schenkein’s finance chief Laura Schenkein has been replaced by Alex Kayyal, who works as a partner at Lightspeed Ventures.
While some analysts were unsure about the sudden change in the role of top finance, the greater concern is the growing role of Amazon in the online advertising market and the potential impact of tariffs on President Donald Trump’s ad spending.
Amazon has emerged as a key player in the digital advertising market in recent years, and is currently the third behind Google and Meta. Last week, Amazon reported that AD revenues for the second quarter increased 23% to $15.7 billion.
Amazon’s advertising business is primarily tied to its own platform, where brands pay and are sometimes discovered in vast markets. However, Amazon’s Demand Side Platform (DSP), which allows brands to programmatically place advertisements on a wider internet property, has gained more resonance in the market.
“Amazon now unlocks access to traditionally exclusive “premium” ad inventory across the open internet, examining the strength of its DSPs, suggesting that Trade Desk value proposition could erode over time,” Wedbush analyst wrote Friday.
Wedbush analysts reduced the rating on Trade Desk to a hold equivalent from purchases, citing Amazon’s recent ad integration. Disney As a sign of company aggression.
When asked about Amazon over the phone, an executive at The Trade Desk responded by suggesting that the companies weren’t actually competing, highlighting that Amazon is at odds as Amazon always prioritizes its own properties.
“As advertisers help them make purchases across the board, a scaled independent DSP like a trade desk will become essential, and it will become essential that they have to do it without conflict or compromise,” CEO Jeff Green said over the phone. “We understand that Amazon has almost doubled its supply of Prime Video Inventory in recent months. That’s creating a lot of competition.”
Analysts voted by LSEG reported that trade desks in the second quarter increased 19% year-on-year to $694 million, surpassing the $685 million estimate. Earnings per share adjusted for 41 cents, beating the estimate by one penny.
Looking at the third quarter, the Trump administration’s tariffs were also a theme. This is because it forecasts revenues of at least $717 million and represents growth of at least 14%.
“From a macro perspective, some of the world’s biggest brands are absolutely facing pressure and some uncertainty,” Green said. “Some people have to deal with tariffs more than others. Many people control inflationary concerns and the associated prices that come with it.”
Friday’s slump caused TradeDesk stocks to fall 54% per year, while the S&P 500 is up around 9%. The trade desk was added to the S&P 500 in June.
Watch: Trade Desk Stock Sink
