Snapchat's growth stalls in Facebook's shadow in 1Q report

For one, Snap already has more daily active users than Twitter does, by his estimates, and it's growing both revenue and user-count more quickly.

After closing the day at $22.98, Snap's shares tanked 21.5% in overnight trading and continued to fall during trading on the New York Stock Exchange (NYSE) on Thursday, closing at $18.05, a loss in value of almost $6bn, according to The Guardian.

About $2 billion of Snap's $2.2 billion net loss in the January-March period was for IPO-related stock compensation costs.

A number of analysts recently issued reports on SNAP shares.

Shares of Snap (NYSE: SNAP) also declined in trading Wednesday to close at $22.97. Snap stock plummeted 24% to $17.59 per share after the company's first quarterly earnings report since going public showed disappointing revenue growth and the slowest pace of user growth in years, reports Business Insider.

Snapchat added just five million daily active users in the final three months of a year ago, down from at least 10 million added in each of the previous four quarters. As of March, the company said it had about 161 million daily users.

Most analysts blame Facebook and the recent launch of Snapchat-like features on Instagram via Instagram Stories and Facebook Messenger. Meanwhile, Facebook itself boasts more than 1.9 billion monthly users. The stock was down 23 percent as the call, a first for CEO Evan Spiegel, chief strategy officer Imran Khan and CFO Drew Vollero, wrapped up Wednesday afternoon.

“Just because Yahoo has a search box doesnt mean theyre Google, ” he said. Snap is in its early monetization phase, and investors and analysts were expecting a continued growth.

According to its pre-IPO filing with the U.S. Securities and Exchange Commission, Snap reported 161 million daily average users by the end of 2016. For advertisers seeking a maximum audience, such data could make them less likely to spend money on Snapchat.

"It's just early days for us", he said.

Investors are anxious that Snapchat will continue to falter as Facebook (NASDAQ:FB) continues to target the app's audience.

"We saw $100 million worth of short selling in this past week, ahead of the earnings and Snap short interest stands at $946 million, which is the highest level since the IPO", he said.

Out of this $8million came from sale of spectacles, a hardware product that the company has introduced. Stifel Nicolaus reissued a "hold" rating on shares of Snap in a report on Thursday.

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