Snap does not have much luck with gadgets. Video recording glasses first sold in 2016 led to a near $40mn loss. The release of Pixy, a little yellow drone, has coincided with a sharp drop in the company’s share price this year.
Co-founder Evan Spiegel’s determination that Snap is a camera company means he will probably continue to bring out new hardware. But investors are rightly more concerned with his company’s operations as a social media network that derives revenue from digital advertising.
Rising user numbers are not enough to save Snap from falling revenue growth. The Los Angeles-based parent of Snapchat has warned that it will miss a revenue growth target of 20-25 per cent as well as adjusted ebitda targets in the current quarter. Its hopes of positive net income this year may be over. The stock dropped 29 per cent in after-hours trading. That puts Snap more than a third below its 2017 listing price