Why Snap's Shares Plunged After It Reported Earnings
Shares of Snap (NYSE: SNAP) fell by as much as 14.3% in early trading Wednesday after the social media company reported its fourth-quarter financial results. The stock recovered slightly from that session low, but was still down by 11.4% as of 10:30 a.m. ET.
For the quarter, revenue was up slightly to $1.30 billion, but the company swung from net income of $23 million in the prior-year period to a net loss of $288 million. Free cash flow fell from $161 million a year ago to $78 million.
On the conference call, management said that investments in new advertising technology have weighed on the company's bottom line, and noted that its ad partners have cut back on their spending. But it hopes that better tracking and analytics will lead to higher ad rates in 2023. So far, the market isn't buying that bullish thesis.
Source Fool.com
