Snap Falls Apart, Shares Crater

By Douglas A. McIntyre Published Feb 7, 7:15AM EST

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Snap Falls Apart, Shares Crater — © stockcam / Getty Images

Snap Inc. (NYSE: SNAP | SNAP Price Prediction), the social media company, posted earnings that were much less than forecast by investors. Its stock plunged 30%. That puts it at about $12 a share. They traded at almost $18 late last year.

Bloomberg pointed out the primary reason for investors’ considerable disappointment in Snap. Digital revenue is down across the industry. Alphabet Inc. (NASDAQ: GOOGL), owner of Google and YouTube, and Meta Platform Inc.’s (NASDAQ: META) Facebook have primarily dodged the decline as advertisers due to their huge numbers of users. However, most other large media companies have suffered.

Savvy investors should have anticipated a problem. Snap laid off 10% of its staff the day before earnings. A company with solid numbers and prospects probably would not have done that. (Customers are abandoning these 25 brands.)

Snap’s revenue rose only 5% in the fourth quarter to $1.36 billion. Alphabet and Meta posted double-digit increases for the same quarter. Snap lost $248 million, compared to a loss of $288 million the year before. Wall Street expected better numbers on both the top and bottom lines.

“2023 was a pivotal year for Snap, as we transformed our advertising business and continued to expand our global community, reaching 414 million daily active users,” CEO Evan Spiegel said as earnings were released. His comments about advertising were overstated, given the results.

Finally, a consideration is that Spiegel has been at the company too long. He co-founded it in 2011 and has been chief executive for much of Snap’s tenure. He has never been able to compete with Facebook, the industry’s leader, and that will not change.

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.