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Social media app Snapchat's parent company Snap Inc is sinking fast in the U.S. stock market, with a $400m loss in its second quarter compounding a major decline since its IPO earlier this year. Snap also fell short of expectations for revenue. (NYSE:SNAP) during the second quarter, according to its most recent filing with the Securities and Exchange Commission. One bright spot: The company did manage to grow its average revenue per user for the quarter to $1.05 from $0.50 in the year-ago period, a healthy increase of 109%.

Snapchat users under age 25 spend more than 40 minutes per day on the app, while those over 25 spend more than 20 minutes a day on the app.

Snap (NYSE:SNAP) last released its quarterly earnings data on Thursday, August 10th. Analysts polled by Bloomberg had expected 175 million on average. "DAUs increased 7.3 million or four per cent quarter-over-quarter from 166 million in Q1 2017", Snap said in a statement.

Pitched as a fresh, daring alternative to Facebook, Snap garnered widespread attention when it went public in March, debuting at $17 per share.

But the messaging app is struggling with fierce competition from Facebook, which offers similar features.

Since it first appeared on the public markets, Snap has described itself as a "camera company", but has given little indication on plans to move into hardware or its broader strategy. While any rise is good, the 173 million total users still doesn't surpassed the 250 million daily active users on Instagram Stories, which celebrated its first birthday last Wednesday.

SNAP Book Value data by YCharts
SNAP Book Value data by YCharts

As Snap becomes cheaper, the company could be attractive to acquirers, said Shebly Seyrafi, an analyst at FBN Securities. Spiegel said he and co-founder Bobby Murphy won't sell any of their shares this year, even once they're free to do so. Investors have been anxious about the volatility of the stock, with a post-IPO ban on employees selling shares expiring on Monday.

Most of the concern with Snap has been related to Facebook and Instagram, which are both copying Snapchat's best features and, in some cases, going out of their way to try and highlight that their user base is bigger and more engaged.

Snap Inc, formerly Snapchat, Inc, is a camera company. The IBD 50 flagship screen of leading growth stocks gives you 50 companies showing top-notch fundamentals.

Several other research firms have also issued reports on SNAP. Headcount in the second quarter grew 10 percent to 2,600, down from the 27 percent growth rate in the previous quarter. That seemed to suggest that Snap thinks it will eventually have opportunities to sell ads within the feature.

A Lithuanian court says a businessman suspected of tricking more than $100 million out of Google and Facebook in an elaborate cybercrime case should be extradited to the United States. The analyst asked which types of techniques Spiegel didn't like.


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