Snap Loses $2.2 Billion in Q1, Stock Plunges 19 Percent

Snapchat parent Snap Inc. hasn’t exactly had a banner run in the two-plus months since its IPO, but all eyes were on its first earnings release. And on Wednesday, Snap sent its investors a tough message.

After markets closed, Snap reported revenue of $150 million and a whopping loss of $2.31 a share — $2.2 billion — for the three months ended March 31. That compares with the $39 million in revenue and loss of 14 cents a share the company reported for the same period a year earlier. Analysts had estimated the company would report revenue of $158 million and a loss of 19 cents a share on average.

That massive net loss sent Snap’s stock down 19 percent in after-hours trading.

Also Read: Snap Q1 Earnings Preview: 3 Things to Watch, From Spectacles to Original Content

But Wall Street wasn’t expecting Snap to make money — even if it didn’t foresee that type of loss. The company announced an increase of 8 million daily active users from the previous quarter on Snapchat, an increase of 5 percent. Daily active users jumped 36 percent from the same quarter the previous year. That growth wasn’t overly impressive, but it could alleviate some concerns over slowing user growth following the release of Instagram Stories last year from Snap’s primary competitor, social media colossus Facebook — although Instagram Stories continues to add users at a far more rapid clip than Snapchat.

In the company’s IPO filing, Snap pitched itself as a TV replacement for younger demographics who simply aren’t tuning into linear television anymore — and are a valuable audience for advertisers. The company claimed 36 percent of its daily active users are between 18 and 24, with another 22 percent between 13 and 17, giving it the elusive cool factor so many brands want to partner with.

In March, Snap partnered with Hollywood fixture MGM to develop Snapchat Shows, its first content partnership with a full-fledged studio. Snapchat Shows are original, 4-5 minute, scripted or unscripted stand-alone programs shot vertically with Snapchat’s preferred orientation in mind. They include both old and new IP and cover a variety of genres, from documentaries to reality TV to dramas.

Also Read: Why Snap Growth Won't Stall Like Twitter's

Snap’s was one of the most anticipated tech IPOs in years, but the stock has languished since. It closed just below $23 a share Wednesday, down more than 1 percent on the day before falling off a cliff after the earnings report.

The company will hold a conference call at 4:30 p.m. ET to discuss the earnings. CEO Evan Spiegel did not provide a quote in the company’s release.

13 Showstopping Media, Entertainment and Tech IPOs Since 2000 (Photos)

Snap Inc.'s recent IPO was the first major public offering from tech and media in a while, but there have been several large ones this century. Viral news behemoth BuzzFeed is set to go public next year.

And while most of them had an initial pop -- not all turned out to be good bets in the long run.
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Snap Inc.

The disappearing-message app that now calls itself a camera company was the picture of success on its first trading day, bringing in $3.4 billion. The stock immediately popped to $24 -- $7 higher than the offering price -- but it's been a rollercoaster ride since, with Snap's shares nearly dipping below their IPO price just two weeks after their high-flying debut.
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Facebook

The social networking behemoth had an inauspicious public debut in May 2012, as the Nasdaq faced technical problems and its stock finished essentially flat from its $38 IPO price, and dropped the next two trading days. Patient investors had the last laugh, though -- Facebook stock currently trades above $140 a share.
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Google

The company currently known as Alphabet went public in 2004 during a fairly flat period for stocks, but investor excitement helped propel its shares past their $85 offering price, closing just above $100. Since then, the search giant has been one of the best performing stocks on the market, spending all of 2017 above $800 a share.
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Alibaba Group

Jack Ma's e-commerce and entertainment conglomerate's shares spiked 38 percent in its first day of trading during what became the biggest IPO ever, but it's been a volatile ride since then. The stock dropped 28 percent in its first trading year before picking up again, spending most of 2017 above the $100 a share mark.

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DreamWorks Animation SKG

The animation studio founded by Hollywood royalty Steven Spielberg, Jeffrey Katzenberg (pictured) and David Geffen was a hot ticket for investors, pricing at a higher-than-expected $28 a share when it went public in October 2004, and giving the company a market cap of about $3 billion. NBCUniversal acquired the studio in August for $3.8 billion.
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LinkedIn

Wall Street couldn't wait to connect with the business-focused social network, more than doubling LinkedIn's share price on its first trading day in May 2011. Microsoft bought LinkedIn for $26.2 million last year.
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Twitter

The social network that now doubles as the unofficial White House press office had an auspicious debut when it went public in 2013, soaring nearly 73 percent higher than its $26/share offering price. But beset by executive turmoil and failures to evolve the product, Wall Street fell out of love with Twitter pretty quickly, and its stock now trades below $15.
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King Digital

The "Candy Crush Saga" company was apparently not a sweet deal for investors, as its stock opened 9 percent below its $22.50 offering price and continued sliding through its first trading day. Activision acquired the game maker last February for $18 a share -- well below its IPO price.
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GoPro

The action-focused personal camera company had a thrilling debut, jumping 31 percent higher than its $24 a share offering price. But like several other recent tech IPOs, those good feelings did not last, as the stock now trades south of $9 a share.
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Groupon

The daily deals site went public at $20 a share in late 2011 at a time when that economic model was still in favor, and bullish sentiment pushed Groupon shares about 31 percent higher its opening day. However, shares fell off a cliff shortly after, and Groupon stock currently trades below $4 a share.
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Line Corp.

The Japanese messaging service, popular in East Asia, saw its shares jump 30% from their $42 offering price when it had its IPO in July 2016. But as new competitors emerged, the shine started to come off of Line, which currently trades for about $37 a share.
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Zynga

The "FarmVille" producer's stock closed its first trading day in 2011 down 5 percent from its $10 offering price, and it's been downhill from there. The company laid off 18 percent of its workforce in 2015, and its stock currently trades at less than $3 a share.
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Demand Media

The home of a family of "content farm" websites like ehow.com went public in 2011, and its shares jumped 33 percent its first day. But as internet users became savvier -- and search engines cracked down on low-quality traffic -- the company suffered, with its stock plummeting 69 percent its first year. Demand rebranded as Leaf Group last year.
Demand Media

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Here are major debuts from this century

Snap Inc.'s recent IPO was the first major public offering from tech and media in a while, but there have been several large ones this century. Viral news behemoth BuzzFeed is set to go public next year.

And while most of them had an initial pop -- not all turned out to be good bets in the long run.

View In Gallery

13 Showstopping Media, Entertainment and Tech IPOs Since 2000 (Photos)

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