Jamie McKane
MyBroadband Journalist
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Snapchat plunges due to controversial redesign
Snap Inc. sank 20 percent in pre-market trading after reporting first-quarter sales and daily active users that missed estimates.
The shares are on pace to open near a record intraday low. At least three analysts cut their ratings, as Wall Street laid blame on Snap’s controversial app redesign and said management must act quickly to keep users from fleeing to Facebook Inc.’s Instagram.
Deutsche Bank (Kunal Madhukar)
“Snapchat risks losing its cool status with users frustrated by the redesign, which makes advertisers increasingly unlikely to put money into Snap advertising without clear return on investment.”
Not clear why the app redesign was rolled out broadly, and even less clear why it hasn’t been more aggressively rolled back already. “Luckily engagement remains strong” so the company has a core base of users and can turn things around Given intense product and monetization competition from Instagram, Snap has to move fast to change the narrative, particularly given its cash burn levels. Hold, price target cut to $12 from $15.
[Bloomberg]
Snap Inc. sank 20 percent in pre-market trading after reporting first-quarter sales and daily active users that missed estimates.
The shares are on pace to open near a record intraday low. At least three analysts cut their ratings, as Wall Street laid blame on Snap’s controversial app redesign and said management must act quickly to keep users from fleeing to Facebook Inc.’s Instagram.
Deutsche Bank (Kunal Madhukar)
“Snapchat risks losing its cool status with users frustrated by the redesign, which makes advertisers increasingly unlikely to put money into Snap advertising without clear return on investment.”
Not clear why the app redesign was rolled out broadly, and even less clear why it hasn’t been more aggressively rolled back already. “Luckily engagement remains strong” so the company has a core base of users and can turn things around Given intense product and monetization competition from Instagram, Snap has to move fast to change the narrative, particularly given its cash burn levels. Hold, price target cut to $12 from $15.
[Bloomberg]
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