Snapchat's slow growth rate not sitting well with investorsBy Robin-Leigh Chetty 11 May 2017 | Categories: news
At the beginning of the year, Snapchat made its transition to Snap Inc., as the company readied its IPO, which was set around the $3 billion mark. Snap Inc. successfully reached the mark, but prior to the IPO going public, the company warned investors that Snap Inc. may not become profitable for a number of years.
That didn't seem to dissuade any investors at the time, however, the recent quarterly earnings are leaving them less than pleased. Despite growing its daily active user base to 166 million since the IPO, Snapchat (the app, not the company) still trails Instagram's copycat offering Stories, which has 200 million users. Add to that a recent report that suggests more celebrities are turning to Instagram Stories over Snapchat, and the latter has some serious catching up to do.
The slow growth rate is exacerbated by losses totalling $2.2 billion, a large chunck of which were bonuses paid out after the successful IPO, notes The Verge. As such, the estimated $150 million in revenue does not come close to matching the losses the company has incurred.
It appears the losses are only going to continue to mount up for Snap Inc., and when you factor in the effect that will have on share price, the situation could very soon turn dire for a company that had one of the most popular social media apps over the past two years.
Precisely when, or even if a turnaround will happen, remains to be seen. As such, videos like the one below, may be a fond memory of what the app once was.
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