NY, USA – DECEMBER 26, 2019: Snapchat paper logo lies with envelope full of dollar bills and smartphone
The title of Snap, the company behind the social network Snapchatcollapses on the stock exchange register a loss in value of 27% which results in a reduction of 47 billion dollars in capitalization. At the root of this collapse are the latest decidedly lackluster results collected by the company which has lost 65% of its value since the beginning of the year.
Snapchat’s value collapses on Wall Street
Snapchat has to contend with significant problems that result in a decline in financial results and, therefore, its value on Wall Street. The company did not achieve the financial objectives set for the first half, despite a 13% growth in the second quarter compared to the first quarter of the year. The collapse of Snapchat’s stock is linked to various aspects.
The macroeconomic challenges and the Apple’s privacy shutdown they are creating many difficulties for the company. Then there is the competition factor and the growing growth of TikTok. It should be noted, however, that Snapchat daily users are growing (+ 18% compared to last year) with a total of 347 million, a figure higher than analysts’ estimates.
For the company it is now necessary to find nuove sources of income as the advertising business does not seem to be sufficient to make its business sustainable. For the time being, Snapchat has chosen to counter the plunge in its stock market value by going to significantly slow down hiring, a common trend of many tech companies.