Published: Fri, May 19, 2017
Business | By Max Garcia

Snap Inc. loses $2.2B in first quarter as public company

Snap's shares plummeted moments after it released a troubling first quarter earnings report on Wednesday, its first since going public.

The company's net loss widened to $US2.21 billion, or $US2.31 per share, in the first quarter, from $US104.6 million, or 14 cents per share, because of stock-based compensation around the IPO.

The company rebranded as Snap Inc last year, and its $3.4 billion public listing was the hottest technology offering in three years.

Snap posted sales of $149.6 million for the March quarter, far below Wall Street estimates. The whole Instagram app has about 700 million monthly users.

Shares in Snap plunged almost 20% in after-hours trade to $18.46 following the results.

"If you want to be a creative company, you have to be comfortable with and enjoy the fact that people copy your products when you create great stuff", he said.

Unfortunately for its shareholders, SNAP stock missed that mark too. Snap's user growth, it states, will be key to watch going forward. However, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were negative at US$188.2 million, doubling losses of US$93.2 million a year earlier.

The Q1 report says the app saw 166 million daily active users during the first quarter, up from 158 million during the final quarter of 2016.

He emphasized that users were still highly engaged with Snap.

On Snap's Q1 earnings call Wednesday, Spiegel was asked bluntly: "Does Facebook scare you?" Its nearest competitor Facebook-owned Instagram now has 700 million users, with its "Stories" feature having 200 million daily active users.

All the copying appears to be paying off for Facebook.

It is also registered an increase of 36 per cent on the 122 million daily users the app had this time previous year.

"At the end of the day, just because Yahoo, for example, has a search box, it doesn't mean they're Google". I use US and Canada because that's where Snap's target market appears to be.

Snapchat, however, has already been more than eclipsed by Instagram Stories.

Shares in Twitter (NYSE:TWTR) and Facebook also slid after they posted debut scorecards. Facebook was driven down by investor doubts about its ability to make money from mobile devices. This is a tactic that Twitter followers will be familiar with.

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