Published: Thu, May 18, 2017
Money | By Armando Alvarado

CEO Evan Spiegel Just Lost $1.22 Billion After Snapchat Earnings

Snap, which calls itself a camera company, posted its debut quarterly scorecard following its hugely successful IPO in March, reporting slowing user growth and widely missing Wall Street's revenue expectations.

Snap (SNAP) posted its first quarterly report as a public company on Wednesday and the results shed light on numerous social media upstart's vulnerabilities: Snap is struggling to maintain user growth and its path to profitability remains unclear.

Snap said average revenue per user rose 181.3 percent to 90 cents in the first quarter while revenue jumped almost four-fold to $149.6 million.

While Snap's stock dropped 23% by the market's open following its first-ever quarterly earnings report, Facebook's stock dropped about 14%.

The company lost $2.2 billion, but Snap explained that the massive loss was due to stock-based compensation to employees following the IPO. The drop in stock price just shaved $1 billion from Spiegel's net worth overnight.

Measured per user, revenues were three times higher than in the same quarter a year ago but 14% lower compared to the previous three months.

Labour at its highest rating in the polls since election campaign began
He added: "The best defence for Britain is a government actively engaged in seeking peaceful solutions to the world's problems". Labour Party leader Jeremy Corbyn said that "waiting to see which way the wind blows in Washington isn't strong leadership".

Quarterly revenue exploded to $149.6 million in the first quarter, nearly a four-fold increase from the quarter before, but analysts were expecting revenue to reach around $158 million. Bank of New York Mellon Corp bought a new stake in shares of Snap Inc (NYSE:SNAP) during the first quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC).

Earlier this week, Snapchat announced it would allow users to send images and video without time limits for the first time, expanding one of the app's signature features in what is seen as an attempted fightback against Facebook. Not to miss out on the trend, Facebook also launched disappearing stories this year. Yes, everything from the core Facebook app or Messenger to WhatsApp or Instagram, they all now mostly look like Snapchat clones.

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. Plus, Snap's brings in a quarter of the revenue that Twitter does, per user, leaving room to expand.

The fact that Facebook, which is ten times larger than Snap, is growing at a faster pace can't sit well with the Street.

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