Snapchat stock takes another dive

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Snap Inc ($SNAP) announced its Q2 results after hours, and managed to combine slower user metrics with widening losses.

The stock opened at $24 on March 2nd, after IPO’ing at $17, a listing that as big a farce as has been perpetuated in the 8-figure bracket in the history of the stock exchange for the privilege of owing non-voting shares.  After hours, it was trading down 17% at new lows of $11.51.

Given their loss quadrupled to $443 million, the only number that mattered was Daily Average Users (DAUs), which slowed in growth again, going up by 7 million to 173 million, up from 143 million a year ago.  That’s not remotely going to cut it – the one-year old Instagram Stories, Zuck’s Snapchat clone, had more than 250 million users at the end of July.  Growth was tepid everywhere, even coming off a low base internationally.

About the only bright spot is that average revenue per user rose to $1.05 (from $0.50 a year ago), which resulted in total revenue of $182 million.

The company gets some revenue from branded or sponsored filters and lenses, but the bulk comes from advertisements.

The problem with that is for every dollar they bring in, cost of revenue is 84 cents, the biggest share of which goes to Google for cloud services to store and send every snap and story posted by its users.

 
If you ever had any, follow Gordon’s advice:


 

Hopefully, you all remember Morgan Stanley’s excellent buy high sell low strategy on the stock:

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Dicslaimer:  this isn’t investment advice.  This is a blog, and most of what I write on this site is pure garbage.  I’m biased, as I own Facebook and Google shares.  Definitely do your own research and don’t rely on my half-assed analysis.  I am not remotely qualified to give investment advice.  

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