Snap Was Always A Terrible Company

By Douglas A. McIntyre Published Apr 16, 10:58AM EDT

Quick Read

Snapchat Was Always Too Small
CEO Has Stayed Too Long
A Poor Future

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Snap Was Always A Terrible Company — © Courtesy of 24/7 Wall St.

Snap (NASDAQ: SNAP | SNAP Price Prediction), a third-tier social media company, played the AI card, laying off 16% of its staff. That is 1,000 people. It will also cut 300 job openings. The cuts should drop costs by $500 million in the second half.

Management has been pressured by Irenic Capital Management, which owns about 2.5% of Snap, to restructure. Restructuring is a standard attempt to improve earnings. It is often futile, as is the case with Snap. It needs help at the top line.

Snap’s stock has fallen 90% over the last five years, while the S&P 500 is up 68%. Long-time CEO Evan Spiegel started the company in 2011. He has run it ever since. He has the power to make corporate decisions as he pleases. As the 10-K points out, “Our two co-founders, Evan Spiegel and Robert Murphy, control over 99% of the voting power of our outstanding capital stock as of December 31, 2025, and Mr. Spiegel alone can exercise voting control over a majority of our outstanding capital stock” So, Spegel alone is to blame for the results that have crushed the share stock.

Snapchat ranked ninth among the largest social media platforms as of last October. It is less than a third the size of Facebook, WhatsApp, and Instagram. It is less than half the size of TikTok. Each figure reflects monthly active users, according to Statista.

Last year, revenue rose 11% to $5.9 billion. However, Snap lost $460 million. Growth was less than mediocre. “The Snapchat community continues to grow, reaching 946 million global monthly active users (MAU) in Q4, an increase of 51 million or 6% year-over-year,” Snap reported.

Although there is no firm trend in social media, the ranking of the top companies by market share is set. There is no chance Snap will become large enough to bring in the revenue it needs to be a viable competitor.

Some investors believe AI job cuts are just a smoke screen for cost-cutting. At Snap, it does not matter which case applies.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.