Snap Falls Apart

Just when it appeared things could get no worse for social media company Snap Inc. (NYSE: SNAP), they did. Snap said its revenue in the most recently reported quarter was flat from a year ago, which is more than a catastrophe for a social media company. Snap management said its internal forecasts were for revenue to fall 2% to 10% in the current quarter. And the end of Snap’s growth marks the day the company’s downward spiral becomes irreversible. (Click here for the American tech companies that laid off the most workers last year.)

For the quarter just reported, revenue was flat at a little below $1.3 billion. Snap posted a loss of $288 million, compared to a profit of $23 million a year ago. CEO Evan Spiegel commented, “We continue to face significant headwinds as we look to accelerate revenue growth, and we are making progress driving improved return on investment for advertisers and innovating to deepen the engagement of our community.” Every bit of information in the release argues against that.

Spiegel (and others) founded Snap in 2011. He remains chief executive and has stayed far too long. Snap competes with Facebook, Instagram and Twitter. It is rare that people use them all simultaneously. Plus, TikTok may have begun to drain market share as well.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

In September 2021, Snap traded at over $80 a share. It probably will be as low as $10. There is no reason for it to trade higher.

ALSO READ: The 21 Companies Making the Most Profit per Second

Snap finally has become a completely failed company. It does not have a product that will help it to recover. It relies on advertising, which is a choppy market, and advertising for social media is widely fragmented. Snap is near the bottom of the food chain.

Snap will stay in business, but that is about all it can say.

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.

Source: Read Full Article