Snap Shares Plummet After First Quarterly Report

Wall Street was looking so forward to Snap Inc. debuting on the market. It was one of the biggest IPOs ever talked about. In fact, the company’s own co-founder Evan Spiegel received a $750 million bonus just for taking his company public.

The stock dropped more than 20% on Thursday after it reported quarterly financial results for the first time on Wednesday. Not only did the company report a $2.2 billion loss, but it also missed on revenues. For the three months ended in March, Snap reported a revenue of $149.6 million. Wall Street had estimated revenue would be around $158 million.

Snap CFO Drew Vollero is still optimistic even if the Street isn’t. He said in a conference call with analysts that the company is “still in investment mode.” Co-founder Spiegel is also still remaining positive and in a conference call with financial analysts said that he is pleased with the company’s first quarter results.

Analyst Jan Dawson of Jackdaw Research said, “The conclusion from all of this is that Snap’s future is that of a niche company dominating narrow segments of the population rather than a company with broad mass market appeal, and that has significant implications for its valuation.”

Other people weren’t so keen on the results. Ross Gerber of Gerber Kawasaki tweeted, “Lost $2 bil!!!! Took the money from shareholders gave to management.”

There is also concern over the company’s user growth. Daily users had increased to 166 million in the first quarter, which may have been an increase of 36% from a year ago, it is also significantly down from the 53% growth the company saw in 2016.

Disclaimer: We have no position in Snap Inc. (NYSE: SNAP) and have not been compensated for this article.