Shares of Snap (NYSE:SNAP) traded down 10.4873% during mid-day trading on Monday, reaching $12.3259.
Snap has a 52 week low of $11.90 and a 52 week high of $29.44 The company's market cap is now $0.
Snapchat became popular among young smartphone users for its disappearing messages, often photos or video but analysts say it needs to show strong growth to keep pace in the rapidly evolving social media sector dominated by Facebook.
Global Equities Research analyst Trip Chowdhry stamped Snap "total junk", arguing that it lacks the fundamentals to succeed. To prove their confidence, co-founders Evan Spiegel and Bobby Murphy have agreed not to sell any shares this year, and the company will withhold shares they're owed to pay for any necessary taxes.
The 27-year-old CEO and his top lieutenant COO Imran Khan explained to Wall Street that there were challenges, but that the company was progressing and innovating in core areas like ad technology and new products for users.
Snapchat hit $181.7 million in revenue in the second quarter, lower than expected. The slowing down of DAU growth is speculated to be the result of Facebook and Instagram copying Snapchat's main features. The average 1 year price objective among analysts that have covered the stock in the last year is $20.83.
Investors remain unconvinced that Snapchat can turn its rapid rise to compete with the likes of Facebook and Twitter into solid profits.
On the other hand, Instagram "Stories" has garnered over 250 million MAUs, Instagram now has almost 700 million users globally.
In after hours trading, shares of the company are down almost 13%. Snapchat's goofy dancing hot dog lens, which overlays a funky frankfurter onto a person's selfies or surroundings, has been viewed 1.5 billion times in snaps, Spiegel said. US Bancorp DE purchased a new position in Snap during the first quarter valued at about $101,000. Harel Insurance Investments & Financial Services Ltd. increased its stake in shares of Snap by 654.0% in the second quarter.
Snap has moved toward self-serve, auction-based ad sales, which Chief Financial Officer Andrew Vollero admitted in prepared remarks had dragged down the average price it commands for ads. The company's revenue was up 153.1% compared to the same quarter a year ago. Cantor Fitzgerald upgraded Snap from an "underweight" rating to a "neutral" rating and cut their price target for the stock from $18.00 to $17.00 in a research note on Thursday, May 11th.
"We've always been last to market competing against giant companies, and we've historically been able to grow our business in markets that are highly competitive and saturated by our competitors because we're so focused on innovation", he said.