The market value of Snap Inc.is disappearing faster than the photos on its app.
Snapchat's parent company Snap Inc lost almost a quarter of its value on Wednesday when its newly listed shares went into a nosedive after the company reported a $2.2bn loss and slowing growth.
This was the first time Snap has had to publish its earnings since it made its initial public offering (IPO) in March, which valued the company at $28bn.
Snap said on Wednesday that it lost $2.2 billion, or $2.31 a share, compared with a loss of $104.6 million, or 14 cents a share, the previous year. The results include almost $2 billion in stock-based payouts. While Snapchat has 166 million daily active users, Instagram Stories has already crossed the 200 million threshold.
Snap said average revenue per user rose 181%, to 90 cents, but fell from $1.05 in the prior quarter. But it hasn't rebounded to when it was adding DAUs in the 10 million-20 million range each quarter.
While the company did see revenue losses, it also saw an increase in daily active users.
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This development isn't really a surprise since analysts have been fearing for the worst ever since Snap went public, Venture Beat reports. The FactSet consensus was for a loss per share of 21 cents. It closed at $22.98 Wednesday but by 5:43 p.m. EDT, shares had plunged to $17.59 and were heading lower, indicating a possible loss of confidence in the company from investors.
"It's a modest program", Vollero said in a conference call with analysts.
"I think we were a little bit late to the trend initially around making cameras the center of how sharing works", Facebook CEO Mark Zuckerberg said on an earnings call this month, without naming Snapchat.
Year-on-year growth in users was 36%, slowing from 48% in the fourth quarter and 63% in the third quarter. As this chart from Statista shows, 46% of those users say they don't use Snapchat's chief rival, Instagram.
If you're Snapchat, today's report looks ... fine, if less fine than one might have hoped.
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