Economy

Snap shares plunge 20% on weak user growth

Snap shares plunge 20% on weak user growth”

It may be too late for Snap's recovery, though, as creators have sprinted to Instagram Stories, where there are over 800 million viewers on Stories monthly (Sept. 2017), significantly more than Snap's 250 million monthly users. The stock was down 9.1% in active premarket trade, but was down as much as 21.4% earlier.

The millennial tech mogul lost more than $560 million of his wealth in the past 48 hours, as shares of the social media company tumbled more than 18% since the start of Tuesday. The company's quarterly revenue was up 62.2% on a year-over-year basis. equities analysts anticipate that Snap will post -2.83 earnings per share for the current year.

The planned redesign will be an attempt to make the network more intelligible to newcomers and advertisers who want to leverage Snapchat's popularity. Thirteen analysts have rated the stock with a sell rating, twenty-two have assigned a hold rating and twelve have given a buy rating to the company.

Snap expected to generate revenue of $237 million, but pulled in $208 million, while posting a net loss of $443 million, CNBC reported. For three quarters straight, Snap missed profit forecasts as it failed to grow Snapchat's user base, which directly ties to advertising revenue. Five analysts downgraded their recommendations on the stock, according to MarketWatch, while a dozen have reduced their price targets.

Since its IPO in March, Snap (TAG) has had a daunting road as its stock price continues to plummet, making Investor Relations of significant focus for the company and its CEO Evan Spiegel. J P Morgan Chase & Co cut Snap from a "neutral" rating to an "underweight" rating and decreased their price target for the company from $14.00 to $10.00 in a research report on Wednesday.

The largest mutual fund holders in SNAP are Price (T.Rowe) Growth Stock Fund Inc, holding 11.9 million shares (1.47% of outgoing shares), followed by Vanguard Total Stock Market Index Fund, with 5,459,111 shares. He said he believes Snap remains a "very interesting asset with great product innovation", but concerns that management lacks visibility into the business, the lack of a ramp in daily-average-user growth and uncertainty over user engagement led him to back away from his bearish stance. The stock had a trading volume of 51,178,844 shares, compared to its average volume of 20,360,000.

"As a result of our ownership structure, Tencent and Snap are not obligated to disclose changes in Tencent's ownership of our Class A common stock, so there can be no assurance that you, or we, will be notified of any such changes".



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