Shares of Snap (owners of Snapchat) fell steeply after the company reported slowing revenue growth in Q2. While revenue grew by 17% compared to Q2 of 2019, it was a big fall from the 44% growth it enjoyed in Q1.
More bad news for Snap coming out of the report:
- Net losses for the quarter rose by 28% to $326M
- Daily users rose by 4%, but the company missed its target by 1 million users
- Revenue growth is going to have to pick up quite a bit to hit Snap's goal of 32% year over year revenue growth
It's not all doom and gloom, though. Some of the punishment Snap is taking in the markets may be due more to the fact that it's share price has risen by 50% since the start of the year, and is trading at a premium compared to its social media rivals.
One Less Competitor?
Snap may also benefit from growing momentum to ban Tik Tok in the United States. The U.S. House of Representatives voted
overwhelmingly to ban the app on Federal government phones, citing security risks.
A top Trump White House officials has said it will be "weeks, not months" before broader action is taken against TikTok.
We wonder if a TikTok ban will coincide with the roll out of Facebook's clone, Instagram Reels
, in the U.S.?