Oh Snap!

Reading time icon 2 min. read


Readers help support MSpoweruser. We may get a commission if you buy through our links. Tooltip Icon

Read our disclosure page to find out how can you help MSPoweruser sustain the editorial team Read more

The king of disappearing pictures has found its share price doing the same trick today, as the value of their shares dropped as much as 22% in after-hours trading, after missing analyst expectations in a number of areas.

Snap generated $207.9 million in 3rd quarter revenue, missing analyst expectations of $235.5 million, and only grew to 178 million daily users, less than the 180.5 million estimated by analysts.

The company’s share price is now nearly $5 under water after a $17 IPO early this year.

The company lost $443.2 million in the quarter, prompting the founders to radically rethink the application, with the aim to simplify it so users who are not teenagers could actually use it as a messaging platform.

“There is a strong likelihood that the redesign of our application will be disruptive to our business in the short term, and we don’t yet know how the behavior of our community will change when they begin to use our updated application,” Chief Executive Officer Evan Spiegel said Tuesday in his prepared remarks to investors. “We’re willing to take that risk for what we believe are substantial long-term benefits to our business.”

Snapchat will also start sharing revenue with its most popular creators.

It was recently revealed that Snap was sitting on hundreds of thousands of unsold Snapchat Spectacles and during their earnings release, the company said it’s taking a $39.9 million write-down on all the inventory they are unlikely to sell. Snap CEO Evan Spiegel had earlier claimed that they sold beyond his expectation.

Snapchat is currently under intense pressure from Facebook’s various messaging platforms, and with their new moves likely to alienate their current user base and a low likelihood of pulling in profitable mums and dads, the Snap camera company may end up being as ephemeral as their trademark disappearing pictures.

Via Bloomberg.com

User forum

0 messages