After Snap Inc. released reports of its first quarter earnings yesterday, it was clear that the company had lost over 60 percent of its $3b IPO value. Another revelation was that its co-founders Evan Spiegel and Bobby Murphy each lost over a billion dollars. The loss though primarily borders on investors being worried that Snap user growth may have either stalled or slowed down.
User base grew by 5 percent to hit 166 million users in this quarter and this was the lowest in two years. As you might expect, this took its toll on revenue as well which stood at $150m versus $158m expected.
But Snap CEO was quick to blame it on Facebook, by saying “If you want to be a creative company, you have got to be comfortable with and enjoy the fact that people copy your products if you make great stuff. Just because Yahoo! has a search box doesn’t mean they’re Google.”
For those counting, Facebook has copied Snapchat features about sixteen times till date with the latest being Stories in the Facebook main app which is reportedly highly underused at the last count.
But overall analysts think we can shrug off the quarter’s report and wait till the next one where user growth is expected to grow further. There’s a lot of hope in Snapchat’s Spectacles. But it looks like Facebook is not done yet with the company it tried to acquire for $3b years ago.