By Andrew Harrer / Bloomberg / Getty Images
When he read what was probably a prepared statement for investors in a profit call Thursday, Snap C.E.O. Evan Mirror's tone reminiscent of a man at the gallows. "We have a significant opportunity to grow in the long term and expand our global community," he said in a monotone grin. "There are billions of people worldwide who are not using Snapchat yet." The reason for his dismay was clear: Snap, which has lost more than half of its value since going public in March 2017, announced in the third quarter that the number of daily active users had dropped to 186 million, and another in the fourth Decline in users predicted. The news sent the company's stock up to 12 percent to an all-time low of $ 6.28. The reasons for the demise of Snapchat are manifold – a botched redesign, low internal morale, a series of shutdowns, Facebook's successful replication of Snapchat's best features on Instagram – but one thing seems to be clear: what could be an aberration now seems existential to be a problem that could threaten the future of the company.
Yet, some employees are hoping for an Android redesign code-named Mushroom to turn things around, a prospect that the mirror has also raised. Android users make up a large part of the global smartphone market, and as Spiegel said in his prepared remarks, Android users are "a global growth opportunity for us" and the new app is "lightweight, modular and performant". The original Android app was slow and flawed as Snapchat first prioritized its iOS app over Android. "Snap users are loud, loyal and volatile," an investor told me. "It's risky to bring hope to the company through another app redesign, but Snap knows what's at stake."
Analysts, however, are much less hopeful. Although Spiegel told staff in a memo that he hopes to make Snap profitable next year, some experts do not believe he has done nearly enough to address the elephant in the room: Facebook and the immediate threat. As early as August, several sources said Bloomberg that the Snap C.E.O. Initially "refused" to believe that Instagram imitators sniffer growth growth of Snapchat (Snap denied this characterization) – an alleged oversight, which, if it was true, his company could have cost. "Instagram Stories' daily active users are now dramatically larger than Snapchat and the time they spend between their Instagram and Snapchat demos is now more evenly distributed than a year ago." Rich Greenfield, Analyst said 1965, Bloomberg
That does not mean that all hope is lost – Twitter was able to make a comeback in 2018, two years after it looked like a prime takeover target with falling stock prices. But Analyst Michael Nathanson is more skeptical of Snap. "Although it is obvious that Snap was not prepared for life as a stock corporation, it now has a more pressing problem – it quickly runs out of money," he wrote to clients. "Call us skeptically – despite the memo – we have no faith in the leadership of Snap to navigate these rapids." Nathanson predicted the company would start raising capital by mid-2019 and revising its revenue projections for 2019 earlier this month, cutting it by 7 percent and forecasting both slower user growth and higher revenue per user.
NYU's Scott Galloway more or less agreed. "I think this company is going out of business," he said last month to Recodes Kara Swisher . "Snap will not be an independent company by the end of 2019." He sees that Google and Amazon are the most likely potential buyers, and of the two, he says that Amazon makes more sense. "I think Bezos says, 'Alright, you have a core circle that buys things and buys irrationally,'" he explained. "Top-class coffee, flapping tennis shoes, they're crazy, we love teenagers because they're stupid because they spend all their money." Another investor I spoke with agreed, adding that if Snap sells, it will It almost certainly goes at a greatly reduced price for a small number of potential buyers. "Telecom giant?" Could not be Facebook? Definitely not Google? You've already failed at social "apple" Maybe, but it seems like a long shot, and it's hard to see how Snap fits into Apple's existing thesis. " Tim Stone, Snap & # 39; s new CFO, was a longtime manager at Amazon, just like the fact that Snap and Amazon launched a joint ecommerce initiative this month, they concluded, "Snap & # 39 ; s best hope in an acquisition scenario is Amazon. "