Snap's Chief Executive Officer Evan Spiegel said neither he nor co-founder Bobby Murphy would sell shares of the Snapchat parent this year. But, as Ciara Lee reports, that failed to soothe investors after quarterly results fell short of analyst expectations.
Their shares may have been snapped up when they first listed five months ago But Snap investors have been less than impressed by the company's quarterly results. Snap CEO Evan Spiegel says neither he nor co-founder Bobby Murphy will sell shares of the Snapchat parent this year. And even that failed to soothe investors. Shares of the Los Angeles company slumped nearly 17 percent in extended trading on Thursday. (SOUNBITE) (English) DAVID MADDEN, CMC MARKETS, MARKET ANALYST, SAYING: "When a stock is not making any money and has an astronomical IPO valuation, and then all of a sudden we see the share price weakening not too long after this stock actually goes on the stock market, traders are very quick to pounce on top of that." Investors are concerned about user growth. And about the company's ability to vie for advertising dollars with rivals like Facebook's Instagram - which has similar features to Snapchat. (SOUNBITE) (English) DAVID MADDEN, CMC MARKETS, MARKET ANALYST, SAYING: "It's going to be a very difficult game to play because Snap is listed the stock market. And when the likes of Facebook were going through this process, they were sort of the only company in this industry which is actually listed on the stock market." Snap reported daily active users and second-quarter revenue below analyst forecasts Since it first appeared on the public markets, Snap has described itself as a "camera company," but has given little indication of its broader strategy. Revenue more than doubled to $181.7 million in the quarter, below analyst expectations of $186 million. A lock-up period preventing insiders from selling shares expired at the end of July.