Snap Inc shares plunged after the owner of Snapchat reported slowing user growth and revenue in its first earnings report as a public company, missing some Wall Street estimates as it competes with copycat messaging apps. Sonia Legg reports.
It was all smiles back in March. Investors put aside their concerns about a lack of profits and voting rights. They all wanted a piece of the action. Two months on "snap" and it's gone. The first earnings report as a public company from Snapchat's owner missed some estimates. And Snap stock fell by almost a quarter to just above its $17 ipo price. (SOUNDBITE) (English) FIDELITY INTERNATIONAL, INVESTMENT DIRECTOR, TOM STEVENSON, SAYING: "The price tag that was put on the company raised some eyebrows. This was a company which was loss making and which faced a really stiff competitive threat from the likes of Facebook with Instagram and I think the results that we've just seen have confirmed the competitive nature of the marketplace." Snap's CEO put on a brave face during an earnings call. 'Just because Yahoo has a search box doesn't mean it's Google', Evan Spiegel told those comparing Snap with Facebook. The performance did in fact echo slides in Facebook and Twitter after their first post-ipo scorecards. But the slowing rate of growth at Snap is a worry for some. Daily active users rose by around a third - half the rate of six months earlier. Competition is an issue too. In 2013 Facebook made a bid for Snapchat. It's now upping the ante by offering similar camera-related features to Snap on its Instagram and WhatsApp platforms.