NEW YORK: Snap Inc shares plunged on Wednesday after the owner of Snapchat reported slowing user growth and revenue in its first earnings report as a public company, missing some Wall Street estimates as it competes with copycat messaging apps.
Shares tumbled 23 per cent in after-hours trading to wipe some $6 billion from Snap’s market value, a reversal for the company after a red-hot March initial public offering that was the biggest for a US tech company since Facebook Inc’s 2012 debut. The stock fell to $17.66, just above its IPO price of $17.
Some investors were hoping Snap would surprise them with big numbers in its first quarterly report, BTIG analyst Richard Greenfield said.
“The fact that they failed to live up to expectations, let alone exceed them, disappointed people,” he said.
The performance echoed slides in Facebook and Twitter after they posted debut scorecards following their IPOs.
Twitter shares cratered 24 per cent the next day, while Facebook’s tumbled 11 per cent, still the biggest-ever one-day losses for both.
Snap Chief Executive Evan Spiegel sought to reassure investors during an earnings call, fielding a dozen questions that ranged from strategy to how it would deal with competitors.
He also did not shy away from one query that allowed him to take a feisty jab at Facebook. “If you want to be a creative company, you’ve got to get comfortable with and enjoy the fact that people are going to copy your product if you make great stuff,” he said. — Reuters
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