Snapchat Stock Tanks. Shaves $1 Billion From Evan Spiegel's Net Worth

Owen Stevens
May 19, 2017

Google went public in 2004, and reported its first earnings in October of that year, with sales of $503 million, while analysts were predicting $456 million.

Snap posted sales of $149.6 million for the March quarter, far below Wall Street estimates. WhatsApp also edged it out with 175 million users. The company generated around $8.3 million from the category in the first quarter of the year, up from $84.5 million in Q4, 2016.

Shares of the company fell more than 24 percent to $17.39 after the first quarterly earnings report since Snap's red-hot initial public offering in March.

Even as he was faced with the challenging prospect of confronting an angry mob of investors and analysts, however, Snap CEO Evan Spiegel still found time to throw shade at Facebook.

"If you want to be a creative company, you have to be comfortable with and enjoy the fact that people copy your products when you create great stuff", he said.

In its first earnings report, Facebook beat expectations. The company however is no where close to achieving profitability.

Year-on-year growth in users was 36%, slowing from 48% in the fourth quarter and 63% in the third quarter. Just 5 million Snaps have been taken using spectacles - there are 3billion snaps on the Snapchat app daily.

On the other hand, Facebook revenue was at $1.18 billion during its first reported quarter; Snap now at $150 million, disappointing analysts, who were expecting at least $158 million. Companies that tend to have massive user growth and growing revenue streams (Facebook) don't tend to focus as much on how many "snaps" users look at. That might help them expand their user base.

Since the Snap IPO, Facebook has been very aggressive about copying Snapchat. Facebook-owned Instagram launched its Stories last August and has amassed more than 200 million daily active users as of last month - 20 percent more than Snapchat. This time last year, Snapchat was adding DAUs at 52 per cent year-on-year. "But I do think at this point, we're pretty much ahead in terms of the technology that we're building".

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