The company behind Snapchat is disappointing. Snap’s stock price is down 25 percent.
Snap, the company behind Snapchat is having a hard time. It suffered a loss of $422 million last quarter. Last year in quarter 2, that was a loss of $152 million. All that loss is not good for Snap’s stock market value. On the stock exchange, 25 percent of the value of the company evaporated after the figures were announced.
New sources of income
Snapchat suffers from advertisers’ budget cuts as well as strict privacy rules. That is why it has to turn around. The strategy needs to be adjusted to generate more revenue sources in addition to advertising.
One way they’ve come up with is a paid subscription. For 4 euros per month you can use Snapchat+. As a subscriber you will then have access to additional functions. Telegram and Twitter are also trying to boost their income in this way.
More users
There was also good news to report. A small bright spot is that the number of daily users of the app still increased. On an annual basis, there are 18 percent more active users, bringing the total number of Snapchat users to 347 million worldwide.
A lot of potential for advertisers you would say. But apparently that doesn’t work. We do wonder how good such an investment in Snap shares actually is. A loss of 152 million last year in Q2 and now a loss of 422 million doesn’t seem to predict a good return on your investment.
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