Snapchat’s stock keeps going downhill amidst continued investor anxiety.
In after-hours trading last Tuesday, Snapchat’s parent company Snap saw its shares fall by 17 percent, or $2.39, to $11.74. Its shares haven’t recovered since.
By Friday’s bell, shares of SNAP landed at $10.80 with a ‘down for the count’ look.
On Tuesday (May 1st), the company missed an expected increase of 7 million users. Instead, Snap’s daily active user base increased only by 4 million users, a number that fell below Wall Street expectations. The app ended last quarter with 191 million total users.
Revenue expectations were also missed. Figures revealed that Snap recorded an adjusted loss of 17 cents per share and revenue of $230.6 million, compared to a year-earlier $149.6 million. That fell short of an analyst forecast of $243.55 million.
In a statement, the company blamed the revenue miss on “seasonality and our redesign,” though the spin was hardly reassuring. “As we have mentioned on our past two earnings calls, a change this big to existing behavior comes with some disruption, especially given the high frequency of daily engagement of our community,” Snap CEO Evan Spiegel defended.
He added: “We are already starting to see early signs of stabilization among our iOS users as people get used to the changes, but still have a lot of work to do to optimize the new design, especially for our Android users.”
Lingering in the background are some serious quarterly misses, including a not-so-complementary tweet by Kendall Jenner. “Sooo does anyone else not open Snapchat anymore? Or is it just me . . . ugh this is so sad,” Jenner tweeted, a musing that cost the company more than $1 billion in market value.
Others are wondering whether Spiegel is really in this game like Zuckerberg, or merely traipsing around with models on faraway yachting trips.
During the fourth quarter of fiscal 2017, Snap brought in nearly $286 million in revenue.
That’s up by 72 percent from the same period the previous year, though none of that moved the needle for investors. Meanwhile, the company is facing extremely stiff competition from Facebook-owned Instagram, which is streamrolling Snapchat with copycat features (and even a few new ones).
Looking ahead, Spiegel told analysts that the company has been “testing the rebuilt application internally and we have quite a bit more work to do before our expected launch in Q3 of this year.”
“In the meantime, we are incorporating some of the new modular components like Discovery and the Friend Feed into the existing application, which we hope will improve performance in the near term.”
Investors don’t seem to be betting long on any of that.