You will be redirected back to your article in seconds

Snapchat Parent’s Stock Staggers to Record Low

Snapchat’s summer of stock misery continues: Shares of Snap fell more than 3% in morning trading Wednesday after Instagram released metrics indicating it’s gaining share on Snapchat among younger users.

Snap shares were trading at $12.73 per share, down 2.8%, as of 11:30 a.m. ET Wednesday. That’s 25% lower than the initial public offering price of $17 per share, and more than 50% off its peak closing price of $27.09 per share on March 3 (the day after its IPO). Snap’s market cap is now around $15 billion, with the company shedding more than $16 billion in value in its first four months as a public entity.

[UPDATE: Snap closed at $12.65 per share, down 3.4% and a new record low, on Wednesday.]

The decline also comes after S&P Dow Jones Indices revised its methodology so that Snap is no longer eligible to be included in the S&P 500 index, effective Aug. 1. Under the change, companies with multiple share class structures will no longer be added to the S&P 500, S&P MidCap 400 and the S&P SmallCap 600. Snap CEO Evan Spiegel and CTO Bobby Murphy as of the end of the first quarter of 2017 controlled 88.5% of the voting power of the company’s outstanding stock.

“Companies with multiple share class structures tend to have corporate governance structures that treat different shareholder classes unequally with respect to voting rights and other governance issues,” S&P Dow Jones Indices said in a statement explaining the change.

In addition, July 31 marked the end of the post-IPO lockup period of some Snap investors to sell their shares; company employees will be allowed to begin selling shares on Aug. 14.

On Wednesday, Facebook-owned Instagram claimed it’s the most popular app for consumers under 25, who spend 32 minutes daily on average on Instagram. Most of the growth in usage is from Instagram Stories, the feature it introduced one year ago that lets users share posts that stay up for 24 hours before vanishing — a blatant copy of Snapchat Stories. In June, Instagram said it has 250 million daily users for Stories.

According to Snap, Snapchat had 166 million average daily active users in Q1, with an average of about 30 minutes per day spent on the app. The company is scheduled to report second-quarter earnings next Thursday, Aug. 10, after the market closes. Last month, Credit Suisse analysts cut their price target on Snap, from $30 to to $25 per share, based on estimates showing a decline in average revenue per user for the second quarter of 2017.

More Digital

  • The Frontier

    Conecta Fiction: Project Pitches Prizes Passed Out in Pamplona

    On Wednesday evening the Spanish city of Pamplona was overrun, not by bulls, but by hopeful TV creators who had spent the early week pitching their projects at Conecta Fiction, and who anxiously waited to find out the titles which would take home silverware. Meanwhile, “Monzón,” a Disney-Pampa-Incaa production portraying the tragic violence of Argentine [...]

  • YouTube logo

    Why Splitting Up YouTube Is a Terrible Idea

    Facing mounting pressure over failures to protect children from inappropriate content, Google is reportedly considering a number of changes to its video sharing site YouTube. The Wall Street Journal reported Wednesday that one of the ideas circulated internally was to effectively split up YouTube, and spin out all children’s content into the existing YouTube Kids [...]

  • Niantic's Harry Potter: Wizards Unite Game

    ‘Harry Potter: Wizards Unite’ to Launch This Week

    “Pokemon Go” maker Niantic is getting ready to launch its next big game: “Harry Potter: Wizards Unite” is set to launch in June 21, the company revealed in a tweet this week. The worldwide launch of Harry Potter: Wizards Unite begins this Friday, June 21! Keep your eyes peeled and wand ready for more information [...]

  • google podcast creator program

    Google, PRX Unveil Second Slate of Their Podcasts Creator Program (EXCLUSIVE)

    Roughly a year after first unveiling its podcasts creator program, Google is renewing its commitment to train budding podcasters. Together with public radio and podcast distributor PRX, Google has chosen 6 podcasters from around the world to participate in the next round of the creator program. The podcasts included in the second cohort are “37 [...]

  • Camila Cabello

    Camila Cabello Reveals Podcast Obsessions, Teases New Album at Cannes Lions

    Camila Cabello was the featured speaker at a Tuesday afternoon panel at Cannes Lions, the annual gathering of marketing, design and entertainment professionals in the south of France. Joined by Spotify chief content officer Dawn Ostroff, the talk, moderated by Variety editor Shirley Halperin, was centered around the theme of the golden age of sound [...]

  • Meg Whitman and Jeffrey Katzenberg

    Quibi Has Already Booked $100 Million in Ad Sales, Jeffrey Katzenberg and Meg Whitman Say

    Quibi, the ambitious short-form video venture from Jeffrey Katzenberg and CEO Meg Whitman, has sold $100 million in upfront ad inventory with six advertisers ahead of its April 2020 debut. Advertisers that have committed ad spending to Quibi include Google, Procter & Gamble, PepsiCo, Walmart, Progressive and AB InBev, according to the company. The $100 [...]

  • China's iQIYI Signs Content, Channel Pact

    China's iQIYI Signs Content, Channel Pact With Malaysia's Astro

    Astro Malaysia, Malaysia’s leading pay-TV operator, has struck a strategic agreement with Chinese streaming platform iQIYI. Astro obtains the exclusive rights to deliver iQIYI content on TV, on-demand and via OTT in Malaysia. It will launch the first iQIYI-branded channel comprising iQIYI’s extensive slate of original content from drama to variety shows and movies. Astro [...]

More From Our Brands

Access exclusive content