Snapchat company plunges on the stock market after weak quarterly figures
The euphoria of the IPO has given way to a major reality check: Snap, the company behind the Snapchat app, is facing yet another debacle with its quarterly results. The stock price has fallen to a new record low in after-hours trading.
The operator of the photo app Snapchat has also disappointed investors with its second quarterly report after its IPO, SDA writes in a report. In the three months to the end of June, the loss widened from $116 million to $443 million compared to the same period last year, Snap said Thursday after the U.S. stock market closed.
Although sales rose by over 150 percent to 182 million dollars, they fell short of analysts' forecasts. The share price plummeted by 14 percent at times in the after-hours trading.
User growth also failed to convince investors. The number of daily active users climbed to 173 million, up 21 percent year over year and four percent compared to the previous quarter. Revenue per user rose to $1.05 from 50 cents in the year-ago period. However, an even greater increase had been expected in the financial market.
Snapchat's parent company Snap went public with great hype in New York at the beginning of March. Recently, however, investors got cold feet. After trading hours, the share price hit a record low below 12 dollars. The issue price of the shares had been 17 dollars. At the close of trading on Thursday, Snap still had a market value of a good 16 billion dollars. This puts the company miles behind its big rival Facebook, but it is valued at almost five billion dollars more than Twitter.
Snapchat is mainly used by people under 30, who appreciate the fact that their messages are quickly deleted again. The company makes money primarily from advertising, competing directly with Google and Facebook. (SDA)
