(SNAP) – Snap Inc shares plunged on Wednesday (May 10) after the owner of Snapchat reported slowing user growth and revenue in its first earnings report as a public company, missing some Wall Street estimates as it competes with copycat messaging apps.
Shares tumbled 23 percent in after-hours trading to wipe some $6 billion from Snap’s market value, a reversal for the company after a red-hot March initial public offering that was the biggest for a U.S. tech company since Facebook Inc ‘s 2012 debut.
The stock fell to $17.66, just above its IPO price of $17.
The performance echoed slides in Facebook and Twitter after they posted debut scorecards following their IPOs. Twitter shares cratered 24 percent the next day, while Facebook’s tumbled 11 percent, still the biggest-ever one-day losses for both.
Snap Chief Executive Evan Spiegel sought to reassure investors during an earnings call, fielding a dozen questions that ranged from strategy to how it would deal with competitors.
Snap said its daily active users (DAUs) rose 36.1 percent to 166 million in the first quarter from a year earlier, marking a slowdown from the 47.7 percent rise for the fourth quarter and 62.8 percent jump for the third quarter that the company reported in its IPO filing.
Snap’s March IPO priced above the company’s target range as investors put aside concerns about a lack of profits and voting rights to get a piece of the action. The IPO raised $3.4 billion and gave the company a market valuation of roughly $24 billion, and shares surged 44 percent in their first day of trading.
Facebook, which made a $3 billion bid for Snapchat in 2013, has upped the ante by offering camera-related features similar to Snap on its platforms, including Instagram and WhatsApp. The company said in April that Instagram Stories alone had reached 200 million daily active users.
Snapchat’s growth was faster than Facebook, however, which said its overall daily user base grew 18 percent year-over-year in the first quarter, as well as Twitter, which reported growth of 14 percent in DAUs from a year earlier.