Af­ter mid­dling quar­ter, Snap will face pres­sure

Snapchat par­ent’s stock at all-time low; Street will want re­as­sur­ance.

Austin American-Statesman - - BUSINESS - By Paresh Dave Los An­ge­les Times Snap

Shares of the Los An­ge­les com­pany that makes the Snapchat mes­sag­ing app breached an all-time low Fri­day, fol­low­ing weaker-than-ex­pected sec­ond quar­ter fi­nan­cial re­sults.

They closed at $11.83, down 14 per­cent, or $1.94. Shares pre­vi­ously traded as low as $11.90.

Snap Inc.’s mar­ket cap­i­tal­iza­tion now sits at about $14 bil­lion, or about how much ven­ture cap­i­tal­ists thought the com­pany was worth a cou­ple of years ago when Snapchat had 100 mil­lion users.

Snapchat counts 173 mil­lion users these days. But the in­crease has come too slow in the minds of in­vestors, who have equated choppy user growth with di­min­ished money-mak­ing po­ten­tial for the un­prof­itable com­pany.

Snap Chief Ex­ec­u­tive Evan Spiegel, who along with his co-founder have enough vot­ing con­trol to di­rect the firm’s fate, say lit­tle has changed in their cal­cu­lus. Nei­ther plans to dump stock any­time soon, and the com­pany has waved off ru­mors of a po­ten­tial $30 bil­lion ac­qui­si­tion of­fer from Google.

Spiegel told fi­nan­cial an­a­lysts Thurs­day that he’s “very ex­cited” about up­com­ing features — which Snap is count­ing on to main­tain user in­ter­est — and that em­ploy­ees are “hav­ing a great time” work­ing on the ideas.

But Wall Street may want re­as­sur­ances that are a bit more con­crete.

Here are three things the Snapchat maker must show three months from now when it re­ports earn­ings, or losses, for the July-to-Septem­ber pe­riod.

■ As­sur­ance that Face­book isn’t a killer: Snap said Thurs­day that about 25 per­cent of smart­phone own­ers in the U.S. are Snapchat users.

Face­book has about 80 per­cent pen­e­tra­tion, ac­cord­ing to third-party mea­sure­ments, sug­gest­ing that Snapchat has plenty of room to grow.

An­a­lysts such as Ralph Schackart at Wil­liam Blair have sug­gested in­vestors should wait it out as Snap cap­tures more in­ter­est.

“Snap’s slight miss on daily ac­tive users and rev­enue should

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