Snap Inc. (NYSE: SNAP)
Shares of Snap took a horrific beating in the after market on Thursday August 10th, 2017 when the company reported their earnings for their fiscal second quarter.
The dramatic move down was due to a larger-than-expected loss and revenues that fell way short of expectations. Shares which had traded up $0.21 in the regular trading session to close at $13.77 fell 16.78% or down $2.31 closing at $11.46 as of 8 p.m. eastern Daylight Time.
Shares coming into the trading day are down 43% year-to-date and have traded in a 52-week range from a low of $11.90 to a high of $29.44.
The company reported losing $0.36 a share, this compares with a $0.14 loss per share a year ago in the same period- almost 4 times the year ago loss. Revenues which had been expected to be around $186 million dollars came in at a measly $181 million dollars.
The above price chart shows the intraday trading action on the left in 5 minute intervals, and the subsequent after-hours massacre on the right.
The above price chart shows the daily price action going back to March of 2017. It is clear to see the upper red resistance line and the lower green support line which will be penetrated when shares open for trading on Friday morning.
Company And Analyst Comments
James Cakmak, an analyst at Monness, Crespi Hardt & Co., said in a note to investors,
“This was a “make or break quarter”-Snap has tremendous potential if it can capitalize on the opportunity in front of it as an alternative platform for advertisers,” but the company is “under pressure from multiple fronts.”
And CEO and co-founder Evan Spiegal added this in the conference call,
“We’ve always been last to market competing against giant companies, and we’ve historically been able to grow our business in markets that are highly competitive and saturated by our competitors because we’re so focused on innovation,”.
An interesting point that also came out of the conference call was that the CEO, Evan Spiegel and co-founder Bobby Murphy, have decided they will not be selling any of their shares for the remainder of this year.
This is important in that when the lock up of the IPO shares comes to an end they are free to sell a certain amount of shares to the general public if they choose.
This may indicate that they feel things may turn around for the company and their share price appreciate rather than continue to crash and burn.
Snap Inc. operates as a camera company. It offers Snapchat, a camera application that helps people to communicate through short videos and images.
The company also provides a suite of content tools for partners to build, edit, and publish snaps and attachments based on editorial content; and Spectacles, which are sunglasses that capture video from a human perspective.
The company was formerly known as Snapchat, Inc. and changed its name to Snap Inc. in September 2016. Snap Inc. was founded in 2010 and is headquartered in Venice, California.-YahooFinance
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.