Battered Snap Inc. (NYSE: SNAP) CEO Evan Spiegel, the longtime leader of the poorly run social media company, raised the hopes of shareholders by saying the company will do well in the future. He has made similar comments before, only to disappoint investors.
According to Reuters, Spiegel said in an internal communication that Snap will have 475 million active daily users next year. Wall Street had expected less. He also said ad revenue would rise as much as 20% next year. However, that is a “stretch goal,” which means it probably will not happen. (Customers are abandoning these 25 brands.)
Snap has disappointed shareholders so often that they are beyond skeptical. Snap also has a small army of competition, including Facebook, TikTok, X and Instagram.
In the past two years, Snap’s shares have fallen almost 90%. Meta’s are flat. In the most recent quarter, Snap’s revenue dropped 4% to $1.07 billion. Social media companies are supposed to be growth businesses. Snap also lost $377 million.
“We are excited by the progress we have made delivering increased return on investment for our advertising partners, growing our community to 397 million daily active users, and reaching more than 4 million Snapchat++ subscribers,” said Spiegel. Almost no one believed him.
One problem Snap has is that Spiegel has been there too long. He has been at the company since 2011. Any observer of American business would say that this is too long a tenure, particularly for someone who has run a business that has fallen apart.
Spiegel may have sent a memo that might have positive news, but that does not cut it.
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