Snapchat share price plummets more than 16 percent

snapchat
Snapchat shares plummet as investor confidence stalls

Shares in Snapchat parent company Snap Inc (NYSE:SNAP) fell over 16 percent on Thursday, amid news of heavy losses for the quarter.

Revenue over the three months to the end of June rested at $181.7 million, more than double the same period in 2016.

Whilst this marked a rise of 153 percent, it remained below analyst expectations proving ultimately disappointing for investors.

Moreover, expenses reached more than $630.6 million, including expenses related to stock-based compensation. In total, the company paid out $242 million in stock based payments and taxes over the quarter.

Nevertheless, the company remained confident of future growth.

“We believe deeply in the long-term success of Snap,” Chief Executive Evan Spiegel told analysts on a call after the results were released.

Whilst the mobile picture app remains popular with users, Snapchat has struggled to compete with fierce competition from the likes of Facebook (NASDAQ:FB) and Facebook owned Instagram.

In fact Facebook has come under fire in recent years for mimicking many of Snapchat’s features, with the introduction of Facebook stories for instance.

Whilst across the period, the App added 7.3 million new users, this was below the 8 million expected by the market. Overall, Snapchat recorded 173 million daily users over the quarter.

Back in June Snapchat launched its Spectacles in Europe. The glasses feature a built-in camera that is activated on the push of a button, located by the right lens frame.

Despite the innovation, Snap inc sold less than 42,000 Spectacles during the second quarter.

The move is part of Chief Executive Spiegel’s attempt to expand Snap Inc out of the App world, and towards the development of technology and social media.

Snapchat has increasingly come under pressure over earnings since its decision to go public earlier in March of 2017.

Snap Inc plunged more than 16 percent after the results were released to $11.50, which is less than half the $27 value back in March.

Shares in the company have rebounded slightly, currently trading up by 1.55 percent as of 10.22AM (GMT).