Snapchat CEO burns Facebook on earnings call

  • Snapchat CEO burns Facebook on earnings call

Snapchat CEO burns Facebook on earnings call

The company's net loss widened to $2.21 billion, or $2.31 per share, in the first quarter, from $104.6 million, or 14 cents per share, due to stock-based compensation around the IPO.

The newly public company plummeted by 23% to $17.75 a share on the first day of regular trading after a disappointing earnings report that saw user growth slow to its lowest pace in years.

This sharp decline comes after Snap announced that it added eight million active users daily in the first three months of this year to a total of 166 million - analysts surveyed by Bloomberg predicted an additional 168 million users. Indeed, the Stories feature on Instagram, which is owned by Facebook, has some 200 million daily users.

Still, there's another way Facebook is already historically beating Snapchat.

Snapchat's Stanford-dropout CEO, Evan Spiegel, has long insisted that his company is not a social network but a "camera company".

"Our favorable outlook on Snap stems not only from the company's ability to innovate and cater to millennials in high value markets, but also capture publisher content and consumer mindshare as video consumption grows on digital", said James Cakmak, an analyst at Monness, Crespi. The company's quarterly user growth slowed previous year in part due to increased competition from Facebook-owned Instagram. Therefore, BTIG analyst Richard Greenfield commented, "The fact that they failed to live up to expectations, let alone exceed them, disappointed people".

That's almost a decade younger than the average age of retail clients trading Snap that day, TD said. Not to miss out on the trend, Facebook also launched disappearing stories this year. "A stronger Android offering could lead to faster long-term DAU growth", they wrote.

Facebook's Instagram has been beefing up its camera features, making its app more like Snapchat.

Daily active users (DAUs) on the app rose just five per cent quarter-on-quarter and 36 per cent year-on-year, to 166m.

But it wasn't all bad news for stock investors - short sellers are poised to make a killing on the share plunge.

- How is Snap monitoring the number of ads shown to users to ensure they aren't frustrated or turned away from the app entirely?

With more than 2,000 employees, hundreds of business partners and big-name rivals in Google and Facebook, how Snap performs can have wide ramifications in the media and technology industries.

Bank of New York Mellon Corp purchased a new position in Snap during the first quarter valued at about $525,000.