Actionable news
0
All posts from Actionable news
Actionable news in SNAP: Snap Inc,

To Be a Player, Snapchat Needs to Play the Game

Public company investing is a stupid, rigged game. But Snapchat should wise up and play along.

On Thursday, the company turned in its second earnings report card since its much hyped IPO. It did not go well. Revenue and the number of new users rose less than expected. A measure of revenue that Snapchat generates from each user was flat compared with the figure in the fourth quarter of 2016. Parent company Snap Inc. should be doing better by now in generating sales.

Combined with the unpleasant surprise Snapchat also dumped on investors three months ago, the second-quarter figures are sure to make investors who had already turned against Snapchat sour even more.

The only reason Snap was able to go public in March with relatively little revenue, a scant track record and a crazy rate of cash burn was that the company has been clever about repeatedly coming up with fresh ideas to keep its mostly young fans returning to the app. (Who would have thought an animated dancing hot dog could be a fun summer entertainment?) The company's creativity and ability to win over the fickle youth made investors willing to overlook its flaws.

But a company built on investor faith is a fragile thing. And that wobbly foundation is eroding. Shares fell about 17 percent in after-hours trading on Thursday. The company's shares look as if they will open...


More