Snap shares slump 30% after revenue miss
The hard fought stock price gains over the past three months were cut down to nothing after the group unveiled its quarterly report.
It posted a loss per share of 15 cents, marginally better than the 17 cents loss anticipated, but revenue missed expectations, rising just 5% confirming concerns that Snap is struggling to compete against its much larger rivals. As a comparison, Meta's advertising sales surged 25% in the December quarter. Google's ad business grew 11% as ad sales from YouTube increased 16% in the same period. In its earnings’ statement, Snap said it will focus this year on increasing Snapchat's user base and invest in markets where the tech company earns the most money, including North America and Europe. It will also lay off 10% of staff to "invest incrementally" in the company's growth over time.
(AI Video Summary)
Snapchat
Snap, the parent company of Snapchat, had a rough day in the stock market. After releasing its latest quarterly results, its stock price dropped by a whopping 30%. Even though their earnings per share were slightly better than expected, the company's revenue fell short of predictions. This raised concerns about Snap's ability to compete with bigger players in the social media industry.
Facebook and Google
To put it into perspective, while Snap's revenue declined by 5%, other tech giants like Facebook and Google saw significant increases in their advertising sales. Facebook's ad sales went up by 25% and Google's ad business increased by 11%. These numbers show the challenges Snap is facing in making substantial earnings.
Snap's stock price
If you look at the share price chart, you can clearly see the drop in Snap's stock price during yesterday's trading sessions. It closed near the 200-day moving average of 11.58. As a response to these challenges, Snap plans to reduce its workforce by 10% so they can invest more in the company's growth. They will focus on increasing the number of Snapchat users and attracting investors in regions like North America and Europe, where tech companies make the most money.
It's uncertain how Snap will overcome these obstacles and whether they will see any positive changes in the near future. There might be a small improvement in the morning trading session, but overall, Snap is in for a tough ride in a highly competitive market.
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