Published: Sat, May 13, 2017
Economy | By Melissa Porter

Jim Cramer Rips Into Evan Spiegel: 'He Needs To Be Hazed'

The newly public company plummeted by 23% to $17.75 a share on the first day of regular trading after a disappointing earnings report that saw user growth slow to its lowest pace in years. He added that failing to live up expectations, let alone exceed them, caused disappointment.

Daily users increased to 166 million, compared with 122 million from the same period last year, a 36 percent jump and its slowest year-over-year growth rate in at least two years, according to The Wall Street Journal.

"They need to acquire the next Snapchat - companies that are doing one thing right", Britton said.

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. "So far, Instagram Stories is believed to have detracted the most from Snapchat's existing user base, but Facebook Stories also appears to be gaining ground".

Evan Spiegel, the co-founder and CEO of Snap Inc (NYSE: SNAP) is earning himself a reputation as being "arrogant".

A lot is riding on Spiegel to build products that delight people, said analyst Greenfield. "But Evan Spiegel, he needs to be hazed". Meanwhile, the company has been burning fuel, losing $2.2 billion in the quarter on revenue of $150 million.

In Wednesday's conference call with analysts, Spiegel sought again to distance Snapchat from the likes of Facebook, pointing out that its main focus was not to get as many users to sign up as possible.

Snap said average revenue per user rose 181.3 percent to 90 cents in the first quarter while revenue jumped almost four-fold to $149.6 million. The Venice, Calif. -based company lost $2.2 billion in the quarter - $2 billion of which was a result of stock compensation.

"It is an eye-popping number for sure", he said.

Raymond James Financial, Inc. assumed coverage on shares of Snap Inc (NYSE:SNAP) in a report published on Tuesday, April 25th.

Snapchat launched in 2012 as a mobile app that allows users to send photos, known as snaps, that vanish within seconds.

Snap receives some revenue from branded or sponsored filters and lenses, but depends on advertising dollars for the bulk of its overall revenue.

The market simply has set a very high bar for Snap, with the IPO priced at extremely high valuation multiples seen by only a few other companies such as Facebook or Twitter.

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