Snap Sinks 20 Percent on Paltry User Growth, Failed Redesign

Shares of the Snapchat parent company hit an all-time low of $10.96 on Wednesday

Last Updated: May 2, 2018 @ 10:24 AM

Shares of Snap Inc. are disappearing into the red, with the Snapchat parent company falling more 20 percent in early morning trading on Wednesday — hitting an all-time low of $10.96.

Wall Street is hammering Snap following its bleak Q1 earnings report, where investors found little to get excited about.

To recap: Snap gained only 4 million daily active users during the quarter — coming up 3 million users short of analyst projections. The company posted its slowest user growth rate in its history. Snap’s $230.7 million in revenue missed average estimates of $243.5 million. And Snap is also making less money off its audience, with the company’s average revenue per user dropping from $1.53 to $1.21 quarter-over-quarter.

Snap’s stock fell to an all-time low of $10.96 on Wednesday, before recovering a bit to $11.24 (via Google)

Investors are pointing to Snapchat’s much-maligned app redesign for the company’s weak user and revenue growth. After initially shrugging off criticism of the changes, CEO Evan Spiegel now seems to agree as well, saying on Tuesday the redesign will be getting a redesign of its own.

Compounding matters, Snap CFO Drew Vollero gave Wall Street little reason to think the company would soon get its advertising business in order, saying on Tuesday Snap’s Q2 revenue growth rate will “decelerate substantially” from the first quarter.

“Snap’s first-quarter results and second-quarter commentary confirm the deleterious impact from changing the product on the fly–especially among the under-penetrated Android user base,” MoffettNathanson analyst Michael Nathanson said in a note to clients.


Looks like you’re enjoying reading
Keep reading by creating
a free account or logging in.