After the SnapChat first successful IPO, the expectations from SnapChat’s First Quarter Earning Report were touching the skies. Even the Wall Street Journal was expecting a big hit from this report but when the report showed up all the expectations fell apart into many pieces.
As per company’s calculation, the revenue during the first quarter is reckoned to be $149.6 million, whereas the loss per share is $2.31. However, most of which is the consequent of share-based compensation. On the other hand, the analyst was expecting some balanced loss that could go to the extent of 16 cents each share. But reality check seemed somewhat shocking. Moreover, SnapChat also disappointed the analyst regarding users boosts.
The trend of its stock is on the decline by 20 percent in extended trade the trip shown in SnapChat’s First Quarter Earning Report. Snap has dwindled to the extent of less than $18 each share, pretty much less of the price with what it kicked off in IPO earlier this year.
However, for a specific lot of analyst did not feel surprised after SnapChat’s First Quarter Earning Report, they are from that lot which raised questions about how the company would manage to grow and regulate the cost since its IPO. Moreover, the company that ultimately gathered guts to show up in public and got a room on Wall Street Journal is somewhat profoundly affected by the Facebook and its almighty dollars. Besides this, Facebook’s shameless strategy has harmed the photo messaging app the most. The constant mimicking of every other innovative feature of SnapChat and integrating them into its acquired app Instagram that already has hundreds of million users daily has hindered the progress of SnapChat.
The overall loss of SnapChat is calculated to be around $2.2 billion in SnapChat’s First Quarter Earning Report, whereas $ 104 million were crunched as losses last year. It means the company has lost twice as much money as it did in last year. However, $2 billion of which is the cost of stock-based compensation expense because of RSUs of the Snap’s IPO. On the other hand, the company’s debuted advertising business seems to be booming but at the same time its cost too. The Wall Street is supposed to examine thoroughly every data of this new IPO, be it the cost, revenue or losses.
In order to keep the pace with big advertising market giants Facebook and Google, SnapChat has to strive more and will work out some strategy to survive and defend against the copycat policy of social media behemoth Facebook in a bid to not wipe out soon.