Just when it appeared things could get no worse for social media company Snap Inc. (NYSE: SNAP), they did. Snap said its revenue in the most recently reported quarter was flat from a year ago, which is more than a catastrophe for a social media company. Snap management said its internal forecasts were for revenue to fall 2% to 10% in the current quarter. And the end of Snap’s growth marks the day the company’s downward spiral becomes irreversible. (Click here for the American tech companies that laid off the most workers last year.)
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For the quarter just reported, revenue was flat at a little below $1.3 billion. Snap posted a loss of $288 million, compared to a profit of $23 million a year ago. CEO Evan Spiegel commented, “We continue to face significant headwinds as we look to accelerate revenue growth, and we are making progress driving improved return on investment for advertisers and innovating to deepen the engagement of our community.” Every bit of information in the release argues against that.
Spiegel (and others) founded Snap in 2011. He remains chief executive and has stayed far too long. Snap competes with Facebook, Instagram and Twitter. It is rare that people use them all simultaneously. Plus, TikTok may have begun to drain market share as well.
In September 2021, Snap traded at over $80 a share. It probably will be as low as $10. There is no reason for it to trade higher.
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