Snap Inc. (NYSE: SNAP) has had a very hard time accomplishing what many social media fans would have liked. The company has a serious issue about how it can and will grow its user base and engagement. And it has now reportedly lost its daily news show from CNN.

Numerous media reports have said that The Update on Snapchat is shutting down. This sounds bad enough, but it has only been operating for four months. The reason behind the shutdown — no clear path to making money.

The news about no path toward profitability spells continued trouble for Snap founders Evan Spiegel as CEO and Robert Murphy as Chief Technology Officer. It isn’t the kind of trouble that can get them fired though, because when they came public they gave shareholders “zero voting rights.”

If CNN is dumping Snap for its daily show, what does this tell advertisers about the power of the platform? Perhaps having a business model formed on your focus product vanishing after a few seconds is great and fun for public usage but is also perhaps a bad strategy for a business that can grow to profits. Even if CNN keeps using Snapchat for other means, as has been reported, still represents a huge loss for Snap’s future business.

In the first nine months of 2017, Snap generated revenues of $539.2 million. That’s up 126% from the first nine months of 2016. The third quarter revenues of $207.9 million were up strong as well, but at a slower 62% growth rate over the third quarter of 2016.

And what will the loss of CNN do for Snap’s user expansion? Snap’s daily active users were 178 million in the third quarter of 2017, up 17% from the third quarter of 2016 but up just 3% from the second quarter of 2017. This has disappointed analysts and investors. And the average revenue per user of $1.17 in the third quarter of 2017 was up 39% from the third quarter of 2016 but up just 12% over the second quarter of 2017.

CNN may not be the only loss here. According to American City Business Journals,, social media nostalgia app Timehop’s founder Jonathan Wegener is leaving Snap after less than a year since joining Snap. Their view is also that Snap is spending money twice as fast as it can make it.

Investors should have always given more attention about their “non-voting” class of stock. The fact of the matter is that Spiegel could literally run Snap into the ground and shareholders would have little or no recourse, and admittedly it isn’t like they could claim they did not know that. In some ways it could be argued that Snap’s public shares for the public are a tracking stock.

Analysts were already not expecting any profits out of Snap. Losing CNN and losing other deals if they were to follow suit might also create lower revenue expectations ahead from analysts. The current Thomson Reuters consensus estimates have revenues rising to $794.6 million in 2017, then to $1.296 billion in 2018 and then up to $2.03 billion in 2019. Earnings are a different story, with losses per share as far as the eye can see. The pool of Thomson Reuters analysts expect a net loss of $740 million in 2017 (-$0.65 per share), followed by a net loss of $751 million (-$0.57 per share) in 2018 and then a loss of $506 million (-$0.37 per share) in 2019.

Snap has secured an investment from Alibaba and has since seen China’s Tencent take a stake in the company. It seems that these passive stakes will likely bring no added clout to Snap’s decision-making unless Evan Spiegel wants them to.

Snap’s current share price is also higher than what most analysts on Wall Street offer as a fair value. The current share price of $15.15 is higher than the Thomson Reuters consensus analyst price target of $12.78. Even 90 days ago that consensus analyst target price was closer to $14.75.

When Snap came public at $17 per share, its shares initially reacted positively with a 44% gain the first day. History has dictated that the excitement was to be short-lived. Snap’s current $15.15 share price is at the very low end of the $11.28 to $29.44 post-IPO trading range.

With or without CNN, Snap remains in denial about its business model. The company touts itself, as it has from the start of its initial public offering filing, as a camera company. Snap is a social media platform. Period. The company’s Homepage says:

Snap Inc. is a camera company.

We believe that reinventing the camera represents our greatest opportunity to improve the way people live and communicate.

Our products empower people to express themselves, live in the moment, learn about the world, and have fun together.

Losing CNN might not actually be a huge blow to revenues for Snap. After all, if revenues were great then CNN might have just asked for a better deal to keep it going. Still, the average revenue per user at Snap is already so low that milking even 100% of the revenues might not make it worthwhile. The loss of CNN would still represent the loss of a serious future opportunity.

CNN gets referred to as fake news quite frequently. With or without the CNN daily show, Snap should be considered a fake camera company. Losing a major media partner like this would represent a big opportunity cost at a time when the path to profitability already looks more than challenging.

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