Snap shares hit all-time low after woeful analyst comment
Photo messaging app Snapchats parent company Snap shares fell to an alltime low after an analyst commented that the company may run out of cash by 2020
San Francisco:Photo-messaging app Snapchat's parent company Snap shares fell to an all-time low after an analyst commented that the company may run out of cash by 2020.
Snap shares tumbled more than six per cent on Tuesday after a Wall Street analyst said the Snapchat parent was "in danger of running out of cash by 2020", NYpost.com reported.
Last week, Snap CEO and Co-Founder Evan Spiegel told employees in a 15-page memo that the company is gunning for "full-year profitability" in 2019.
Instead, Snap is poised to fall "woefully short" of that goal, losing a projected $1.5 billion next year, according to Michael Nathanson of research firm MoffettNathanson.
Snap is not only "running out of money" but also lacks "options to rectify its cash burn problem," Nathanson was quoted as saying.
After dropping as much as 8.6 per cent to bottom out at an all-time low of $6.84 per share, the social media company's stock recovered to close at $7 -- 59 per cent below Snap's IPO price of $17 per share in March 2017.
Nathanson called Facebook the cause of Snap's woes -- the result of its having "unashamedly copied promising product features, such as Stories, and deployed them across its platform."