The descent into hell continues for Snap. In bad shape since the start of the year, with worrying financial performance, Snapchat’s parent company failed to turn things around in the third quarter. Between July and September, the American company conceded a net loss of 359.5 million dollars and achieved a turnover of 1.1 billion dollars, up 6% over one year. The markets were targeting an 8% increase.
With revenue growth now below 10%, Snap is sinking even further into a crisis that Wall Street did not hesitate for a second to sanction. After the announcement of the quarterly results of the company, its action collapsed by more than 30% on the New York Stock Exchange. And today’s session isn’t over yet…
A valuation that has fallen by more than 90% in one year
In the space of a year, Snap saw its market capitalization melt like snow in the sun, with a spectacular drop of more than 90%. Therefore, this means that the stock market raid carried out during the Covid-19 pandemic between 2020 and 2021 has completely evaporated. Now, the company that owns Snapchat is worth less than $13 billion. For its boss, Evan Spiegel, the challenge is therefore to stop the bleeding so as not to end the year 2022 below the bar of 10 billion dollars in valuation.
Weighed down by Apple’s policy on advertising tracking, Snap is unable to raise the bar in a sluggish market, against a backdrop of war in Ukraine and galloping inflation on a global scale which are impacting advertisers’ budgets. In this context, the company decided to lay off nearly 20% of its workforce, separating in the process from employees of Zenly, a French app acquired in 2017 and serving as the basis for the Snap Map. This year, Snap also drew a line under its drone-gadget Pixy just a few months after its launch.
As for Meta, the end of the year promises to be long and painful for the parent company of Snapchat, which now claims 363 million daily active users. Since going public in 2017, Snap has lost $8.3 billion, including $1.1 billion since the start of 2022. And given the current economic slump, a bright spot doesn’t seem likely in the next few months. month.