Shares in the group behind Snapchat fell to a new low on Thursday after an unfortunate set of second-quarter events piled more pain on its investors.
Snap, which drew off the biggest technology flotation when it went public at a $24bn (£18.5bn) valuation this year, declared that it had confirmed 7.3m new registrations in the three months to June 30, a remarkable slowdown in past quarters.
The group also fell short of Wall Street revenue estimates, posting shares falling by as much as 13 percent in after-hours negotiations. Snap’s share value temporarily fell under $12, less than half the $24-value the firm opened dealing at less than six months ago.
Snapchat, which is now utilized by more than 173m individuals each day to share fading pictures and videos, has a strong audience especially amongst adolescents and young adults. But experts suspect its mass attraction and its ability to expand across the world in the same way as competing social apps like Facebook.
Facebook and Instagram have relentlessly cloned the app’s features, and its slowing growth seemed to validate concerns that Snapchat’s larger rivals were killing its expansion.
Its share value has also been under stress as stockholder lock-up periods expire, giving powers to early investors and employees to abandon their shares for the first time. On Monday, 782m shares owned by staff will be made free to sell for the first time, more than doubling the quantity on the market.
Snap is not assumed to become profitable until at least the end of the next 10 years but its $443m loss last night still alarmed investors. Although its earnings rose 153pc to $181.7m, it was still below forecasts.