Due to Pay Bonus to Evan Spiegel, Snapchat More Loss?

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For the first time since becoming a public company (IPO) Snap formerly Snapchat announced its annual revenue.

In the earnings report, Snapchat announced that the number of active users reached 166 million users, an increase of 5 percent compared to the same quarter last year. However, that number is far behind the current Instagram Stories active users who are now 200 million users.


In fact, Instagram Stories is one feature Instagram, a subsidiary of Facebook, whose service is touted to copy Snapchat Stories.

Citing the Tech Crunch page, investors are reportedly not satisfied with the slow growth of Snapchat. The same report calls the company suffering losses of up to US $ 2.2 billion.

Losses are suspected due to the large share bonus paid to a number of high-ranking officials after the successful IPO Snapchat. One of them is a fantastic bonus worth US $ 750 million paid to CEO and founder of Snapchat Evan Spiegel.


When calculated, the value of Snapchat losses reported doubled compared to last year.

If viewed again Snapchat could "burn money" up to US $ 104 million in the first quarter 2016. Then, the losses suffered reached US $ 208 million in the first 3 months 2017, not to mention losses due to other things that are not mentioned. In fact, Snap's revenue is only 90 cents per user.


Despite losses doubled compared to last year, the company is financially increasing revenue.


The same report mentions, Snapchat's revenue increased to US $ 150 million in the first quarter, including sales of Spectacles eyewear US $ 8 million.

Unfortunately, this did not satisfy investors, because it is considered not yet reached the targeted profit of US $ 158 million. Actually, Snapchat is reminiscent to its investors, that the company has not been able to determine when it can benefit. It was delivered before the company did an IPO.

After this condition, Snapchat must convince investors to increase user growth and find ways for the company to profit. Otherwise, it is estimated that share price will be the same with Twitter.
 
 

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