Published: Wed, August 08, 2018
Economy | By

Saudi billionaire takes stake in Snap

Saudi billionaire takes stake in Snap

The drop in daily active users is an unfortunate turn for the company, as it struggled with a tepid reaction to its app redesign late a year ago as well as continuing problems with its Android app.

Snap reported 188 million daily active users during the last quarter - falling short of Wall Street's expected 192 million and dropping from last quarter's 191 million. The main reason for this was the controversial app design change.

Shares in Snap were flat in after-hours trading following volatility that saw them fall briefly before surging more than 12 percent.

Snap had never before logged a quarterly drop in daily users, according to data it has released going back to 2014.

Snap has been redesigning its app to encourage users to interact with more of its ad-supported videos. CNN reports that this is the first time Snapchat's user count has dropped since Snap Inc went public. This is a big one, considering all users see these but not all users necessarily purchase the premium filters that give you horns or make you a Scottish Fold.

Saudi Arabia's Prince Alwaleed bin Talal announced soon after the second-quarter results that he had finalized a $250 million (roughly Rs. 1,700 crores) deal in May to buy a 2.3 percent stake in Snap.

His investment comes about three years after he met Snap chief executive Evan Spiegel and chief strategy officer Imran Khan, when the two executives visited Saudi capital Riyadh. The company also grapples with heightened competition from Instagram, which regularly copies its most popular features.

The earnings report didn't have any specific sales figures for its latest Spectacles hardware, though it did report $2 million in non-advertising revenue. Both companies shed some 19 percent in market value after reporting, and the results also weighed on Snap shares.

Loss per share: 14 cents a share, whereas Thomson Reuters consensus estimate as 17 cents loss per share.

Snapchat's massively unpopular redesign continues to hurt the company. The company beat analyst expectations on revenue, reporting $262 million in revenue, compared with analysts' expectations of $251 million.

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