Snapchat shares plunge after $US2.2 billion loss on $US149m revenue
So hip with the kids, so offside with Wall Street.
It might be millennials’ favourite social media messaging platform but Snap* is in the doghouse on Wall Street.
Shares in the Snapchat maker [NYSE:SNAP] plunged nearly 24% in after-hours trading after a disappointing quarterly result. That wiped $US7 billion from its market cap.
The company reported a $US2.2 billion loss (compared to its loss of “only” $US515 million for the whole of last year) on revenue of $US149 million.
Some $US2 billion of that loss was tied to stock compensation costs for the IPO as the company’s youthful founders made hay.
But analysts were also concerned that revenue was below expectations as user growth slowed.
While Snapchat now has 166 million active daily users, it only added eight million in the quarter just closed, compared to 13 million in the year-ago quarter.
One problem has been that Facebook blatantly copied one of Snapchat’s best features with its new Stories option on Instagram, now used by around 200 million people.
Snap chief executive Evan Spiegel (26) says he’s not worried about Facebook. Maybe he should be.
Most of Snap’s revenue came from advertising but there was also $8.3 million in an “other” category primarily driven by Spectacles – Snap’s internet-connected glasses with a built-in camera. Assuming an average price of $US130, that represents about 60,000 pairs of Spectacles during the quarter.
* Snapchat changed its name to Snap shortly before its March 3 IPO to reflect its ambitions for a broader focus beyond messaging.
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Snapchat shares plunge after $US2.2 billion loss on $US149m revenue
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