Snapchat is one of the most popular social media options today. There are numerous young people who enjoy using the application. However, when Snapchat went public, there were some people who suggested to avoid investing in the company.
Since going public, Snapchat has had a ton of issues. As a result, the stock price of the company has dropped rapidly. In a recent earnings release, the company missed on both sales and profits. This is a dangerous time for the company. More investment firms are coming out with a strong sell recommendation on this company.
One of the biggest issues with the latest earnings release is the declining sales reported by the company. This was not expected for a company that is still in a growth phase.
When looking at the numbers, it is clear that many young people are moving to other social media platforms. This is bad news for Snapchat and the people who invested in the stock. Many experts believe that it will take several months for the company to get things right. Even then, the stock is going to be under tremendous pressure over the next year.
Not only were sales disappointing, but profits were less than expected as well. The company spent more money than they planned on various expenses. This came at a bad time as the company was struggling to improve sales.
The leaders of the company have promised to be more strict in looking for opportunities to reduce expenses. Snapchat is going to invest money into redesigning the user interface of the application. This is supposed to make the application easier to use.
Snapchat is a company that experienced great growth in the early years of the business. However, it is having trouble getting to the next level. In the latest earnings release, the company disappointed investors with a terrible quarter. Not only were sales low, but expenses were much higher than anyone planned.
If Snapchat is going to survive, it must make drastic changes to the application and to the overall business model of the company.