Shares of Snap are down nearly 20% this morning, a big haircut to the valuation of the social networking company.

In one way, of course, the post-earnings drop is an indictment of the business. And on the other hand, Snap's stock has simply retreated to midyear levels and remains miles above the historical price range it found itself mired in during its more unprofitable days.

But Snap's earnings report and its trailing selloff haven't kept its impact limited to just the company's own value. Other social companies took hits, too: Facebook shares were off nearly 5 percent this morning, while Twitter fell around 3 percent. It's a crappy day for social media companies that are public-and for their private-market brethren, even if we can't see the prices change as granularly.

Why Snap is down: Supply chains and Apple's power
Snap reported Q4 revenue of $1.07 billion, below the Street's expectations of $1.10 billion, CNBC reports. Revenue climbed 57% year over year. Net loss narrowed to almost $72 million in the quarter, down from nearly $200 million in the same quarter a year earlier.

Even better, Snap posted massively improved cash flow results in the period compared to its year-ago results. Growth? Check. Improving profitability? Check. Ability to self-fund? Check. And yet its stock fell sharply. Why? Guidance.

Looking ahead, Snap said that it expects revenues for Q4 2021 "to be between $1.165 million and $1.205 million." The market, meanwhile, expected the company to generate $1.36 billion in the current quarter. Yahoo Finance's lowest analyst estimate for Q4 2021 Snap revenue was $1.20 billion. The company may miss even that guess.

Companies priced more on growth than GAAP profitability tend to swing sharply when growth slows. And Snap is projecting an almighty revenue growth deceleration. That explains the selloff. But what explains the company's slowing revenue growth?

According to the company's earnings call, Apple was one of them:

Apple implemented broad changes to its ad tracking on iOS in June and July. We had expected some disruption to our business, but the new Apple measurement solution did not scale as we had anticipated, and it was even tougher for our advertising partners to measure and manage their ad campaigns for iOS.

Macro-related issues around supply-chain delays:

This trend has been exacerbated by the continued macroeconomic effects of the global pandemic, which our advertisers on the one hand face a range of supply chain interruptions and labor shortages. That in turn diminishes their short-term appetite to generate additional customer demand through advertising at a time when their businesses are already supply-constrained.

More concretely, Snap said that Apple's SKAdNetwork was built to "allow app-based advertisers to continue measuring their advertising on iOS" after the company shook up the operating system's privacy controls and has produced results that "diverge meaningfully from the results we observed on other first and third-party measurement solutions, making SKAN unreliable as a standalone measurement solution." Bad.

On the supply-chain point, the company elaborated further in the same call, stating that it has "heard from advertising partners across a wide variety of industries and geographies that they are facing headwinds in their business related to disruptions in global supply chains as well as labor shortages and increasing costs.". In return, we expect this to come through in Q4 demand for ads, particularly since, in most cases, their businesses will not have the inventory or operational capacity to service incremental demand."

A double-whammy, then, for growth.

Investors seem to believe that these problems being suffered by Snap with Apple and the global supply crisis limiting advertiser demand, are going to bleed over into other social companies. That's why Facebook and Twitter are also down in trading today.

Which, I think, fits neatly into the logic behind Facebook's move toward a metaverse focus.

Meet the metaverse
I could never really figure out why Facebook spent so heavily on VR when the market for virtual reality was still figuring its shit out. It felt extraneous, to a degree, when stacked against the company's product mix at the time.

But against my better judgment, this move may have been pretty brilliant from a strategic perspective. Case in point is as follows:

If Facebook knew for some time that its core applications were seeing usage declines in certain markets and certain demographics (it did),
Then it may have started laying long-term bets for future products that could help the company turn the page on its first generation of services toward something else,
And as that entity is, apparently, the metaverse, historical VR spend makes sense.
The above fits into the Snap revenue issues as the smaller company's problems are an indication that the social media market may be losing some of its revenue luster; Facebook may face similar issues, which would merely underscore the sorts of cracks it may have seen coming to its core social networking business model.

So, something else will have to fill the gap, and Facebook seems to have planned to stuff VR into that very gap. The company's rebrand fits neatly into that kind of push.

A lot of the above is speculative weaving, but I do think that the Snap report makes Facebook's metaverse push a little more plausible, provided, of course, that the effort can lead to sizable, high-margin revenues in the near-ish future.