Thursday, 11 May 2017

Snapchat shares tumble as results miss Wall Street targets



Shares in the owner of Snapchat have fallen by a quarter after its first set of results since floating on the stock market missed Wall Street expectations.
 
Snap reported a loss of $2.21bn for the first quarter, mainly due to stock-based compensation linked to the $24bn float in March.


But it was lower than expected revenues and slowing growth in user numbers that gave investors the jitters.


The shares were down by 25% in after-hours trading in the company - which is facing stiff competition from larger rival Facebook.


Snap said its number of daily active users had risen to 166 million, up 5% from 158 million in the fourth quarter of 2016, but lower than some analysts had expected.

 
Signage for Snap Inc., parent company of Snapchat, is displayed on monitors on the floor New York Stock Exchange (NYSE) before the opening bell, March 2, 2017 in New York City. Snap Inc. priced its initial public offering at $17 a share on Wednesday and Snap shares will start trading on the New York Stock Exchange on Thursday



Year-on-year growth in users was 36%, slowing from 48% in the fourth quarter and 63% in the third quarter.
 
 
Revenues were up nearly four-fold compared to the same period last year at $149.6m but lower than the $158m expected on average by analysts.


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


The disappearing messaging app, popular with teenagers, attracted huge interest when it went public in New York earlier this year - sending its shares 44% higher in its first day of trading.


But Facebook - which once offered $3bn to buy the business - has upped the ante by offering features similar to Snapchat on its platforms including Instagram and WhatsApp.




SKY     News.