Snapchat Fails Again

Snap's stock fell more than 15% in after hours trading Thursday following the earnings report.


Snapchat once again failed.

Snap (SNAP), the parent company of Snapchat, is continuing to see staggering losses while user growth continues to grow at a sluggish pace. This quarters loss adds a massive $443 million to snapchats debt, an already fourfold increase compared to its rather modest last quarter deficit 0f $100 million.

The messaging has seen large scale investor concerns since its first quarter earning and as a result of Facebook’s entry into the storied service and this report likely did not help those fears as the service added just seven million new daily active users in the second quarter, falling short of estimates. It now has 173 million daily users, which is an extremely large problem when placed side by side Instagrams story function which now has over 250 million daily story users.

Snap’s stock fell more than 15% in after hours trading Thursday following the earnings report. It is important to note that the stocks lock up period also recently ended allowing the banks that originally funded their IPO to begin the sale of stock.

Snapchat CEO Evan Spiegel spoke on a conference call with investors on Thursday.  Responding the potential damage Facebook has done to Snapchats long term potential he stated

“Just because Yahoo has a search box doesn’t mean they’re Google.”

Soon after transitioning to a comment on the movement towards a “Camera” strategy where the Snapchat Spectacles would play a large part of the companies strategy.

Their Problem?

Sales for the snapchat spectacle actually fell from $8 million in sales in the first quarter to less than $6 million in the second.

It is interesting to note that before the IPO of Snapchat Facebook made early offers to purchase the product, given today’s circumstances what would you have done? Would you have sold facebook?



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Ali Taghva

Business owner, former riding President, and Bachelors in Industrial Relations from Mcgill. Interested in the intersection of politics and culture. I firmly believe in a free media and work to push new stories to your door each day.

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