Snapchat’s 1Q report was not a huge success, to say the least. What caught the eye of many was the sluggish growth, suggesting that being a fresh fad is still far off from being a successful social platform.
The shares, which were already down 21% [i] down from their record high on March 3rd, crashed by as much as 26% in after hour trading (according to Bloomberg).
Meanwhile, Facebook has been working hard on copying just about any feature Snapchat has that’s worth copying. In case you forgot, in 2013 Facebook tries to purchase Snapchat, but was unsuccessful, and it seems the social giant has turned to the ‘if you can’t beat them, copy them’ approach.
Snapchat also attempted to copy some of Facebook’s practices, hoping to improve its ability to deal with advertisers. It doesn’t look as if so far the strategy has been successful.
On top of the user growth slowdown, the company reported a substantial decrease in revenue – even more substantial than was estimated. This is the company’s 1st earnings report after going public. Last week, Facebook reported double-digit revenue growth. Facebook also struggled following its own IPO, but its user base was still far larger than Snapchat’s.
What will happen to Snap’s shares when the market opens? Stay informed.
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