Feb 6th, 2024 – Today, Snap Inc. (SNAP) saw its shares’ price plummeting down by around 30% at 5:00 PM EST because of the huge discrepancy between Snap’s quarterly revenue estimates produced by Wall Street analysts and the results disclosed by the company itself on Tuesday. Going into detail, while the forecasted revenue was $1.38 billion, the actual financial result disclosed by Snap was equal to $1.36 billion, on the basis of LSEG data. In this adverse context, Snap still struggles to compete against its main rivals in the digital advertising industry like Meta and Alphabet. This is mainly due to the fact that they are better at targeting ads (thanks to the vast amount of data they can rely on) and the recent large job cuts, reducing their costs drastically. Another negative result achieved by the Santa Monica based company (that is probably linked to the bad performance in terms of revenue and market trend together with the previously cited crisis in the digital advertising field) is that the number of Snapchat users in North America remained stagnant in 2023 Q4, while Europe users grew by only 4 million in comparison with 2023.
Three of the main television companies worldwide, Disney (DIS, +2.73%), Fox Corp. (FOXA, +0.67%) and Warner Bros just announced that they are about to release a new and alternative joint sport platform during the course of 2024 in an effort to reach younger audiences and, of course, this is also a strategy that will probably lead to a substantial costs reduction for all three of them. The platform will likely be made available to customers in the form of a new app, creating a new brand and with an independent management team that will take care of it.
Author: Piero Foberti