Shares in Snap Inc., the parent company of photo-messaging app Snapchat, plunged by almost 24 per cent in after-hours trading on Wednesday, after the release of the company's first-ever quarterly earnings report as a publicly traded firm.
Snap, which went public on the New York Stock Exchange on March 2, said its daily active users had grown by 36 per cent to 166 million in the first quarter of 2017, from 122 million in the same quarter last year.
Revenue for the quarter was $149.6 million US. Analysts had expected revenue closer to $158 million. The company reported a net loss of $2.2 billion, or $2.31 per share, $2 billion of which were expenses due to stock-based compensation.
Average revenue per user, a key metric for a company that relies on advertising, was $0.90 in the first quarter. That's an increase of 181 per cent over the same quarter last year, but a decrease of 14 per cent from the previous quarter.
Facebook, Twitter had big drops
After slipping by 34 cents to close the regular trading day at $22.98 US, Snap shares were down to $17.48 during the after-hours session.
If shares in Snap fall precipitously during trading on Thursday, the company will be following in the footsteps of its competitors Facebook and Twitter.
Twitter shares cratered 24 per cent the day after its first earnings report and Facebook's tumbled 11 per cent after its. Both drops stand as the biggest one-day losses for each company.
While Facebook's shares recovered from the drubbing within two quarters and trade at nearly four times their $38 IPO price, Twitter's shares never completely regained lost ground and currently trade down nearly a third from their $26 IPO price.
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