The company is spilling money and its new investors have many reasons for not being happy, despite the warnings from the firm itself.
The company published its financial report for Q1Â of 2017 and, in that period, losses doubled those of 2016 during the same period.
Between January and March last year, Snapchat lost $104 million; Between January and March 2017, Snapchat lost $208 million. The issue is that, as The Verge reported a while ago, Snapchat had told its investors in an official report that they had lost money in the past, that they would continue to lose in the future and would probably never be profitable. No, it’s not a joke: the public report said this.
On the other hand, the active user base reached 166 million, up 36% over the same period Â last year. However, when compared to the previous quarter, the numbers are not so great: growth is only 5%.
The biggest potential problem for Snapchat is that the user base is limited. And that is possible in a world where Instagram and Facebook are implementing similar solutions in the form of “stories.” Facebook also reaches a wider group of people than the critical mass of Snapchat, mainly adolescents.
The future of Snapchat looks somewhat complex. I’m not an investor in SNAP, but if I were you, I’d pull out now.