Even A Snap Filter Won’t Make This Look Pretty

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On Thursday May 11th/2017 Snap Inc.’s (NYSE: SNAP) shares declined 21% following their first earnings report since IPO (Initial Public Offering) launch.

Snap Inc., the parent company of social media app: Snapchat, went public on the New York Stock Exchange on March 2nd/2017. Their IPO was the largest US tech IPO since Facebook in 2012 and the largest overall US IPO since 2014 valued at $24 billion. After this earnings report Snap is now valued at $20 billion with the primary concerns for investors being slowing user growth, competition, and innovation.

In today’s global economy market growth is rare. Large publicly traded companies such as Wal-Mart (NYSE: WMT), Coca Cola (NYSE: KO), P&G (NYSE: PG) have faced low revenue growth rates whereas fast-growing companies like Airbnb and Uber are not listed on a stock exchange. As a result investors have experienced extreme difficulty in building a diversified growth portfolio. This is the primary reason to why the technology sector is currently overvalued. High-growth companies like Amazon (NASDAQ: AMZN), Facebook (NASDAQ: FB), Apple (NASDAQ: AAPL), and Netflix (NASDAQ: NFLX) reside within this sector and as a result have seen risk-on investing from investors looking for returns.

Source: Sector — Technology, Morningstar Market Valuation <http://www.morningstar.com/market-valuation/market-fair-value-graph.aspx>

For Snap Inc. all eyes are on how they plan to product innovate, increase average ad revenue per user (ARPU), and address fierce competition from Facebook with the release of Instagram stories.

Source: https://www.statista.com/chart/9086/daily-active-users-instagram-stories-snapchat/