Only a few months ago we announced Snap Inc.’s promising debut into the New York Stock Exchange, they closed their opening day with a share increase of 44% and things were looking great. Big emphasis on the past tense used.
It’s no surprise to anyone that the stock market is unpredictable, things are up and down all the time. It seems as though Snapchat has met this fickle beast after releasing their quarterly earnings earlier this week and things did not look good.
With a reported loss of $2.2bn, which is undeniably a huge sum of money, investors have become weary of Snapchat’s long-term growth. Following the release of this report their share prices dropped by 20%, a considerably bleak plummet compared to their opening day.
In all fairness to Snapchat, you sometimes have to spend money to make money but what is concerning is their lack of international revenue. Only 14% of earnings are made outside of North America, if you grimaced at that figure you are not alone.
Not only is Snapchat missing out on huge potential for international revenue but there’s no doubt that this relatively narrow income-base is hitting investor confidence hard.
This definitely isn’t the end of Snapchat’s Stock Exchange story, considering how quickly their stocks dropped, there’s only one way to go, and that’s up.