Snapchat Co-Founders Evan Spiegel and Bobby Murphy Each Lose Around $1 Billion Following Disappointing First Quarter Release

Snap Inc. disclosed its first quarter earnings recently, painting a disheartening picture for its co-founders and investors. The company took a notable dip, losing a whopping 60 percent of its $3b IPO value. What’s more, co-founders Evan Spiegel and Bobby Murphy weren’t spared from this financial blow; both witnessed their net worth drop by over a billion dollars each. This loss stemmed predominantly from rising concerns that Snapchat’s user growth may have either stalled or significantly slowed down.

In the first quarter, the user base witnessed a 5 percent increase, elevating the total count to 166 million users. However, the seemingly small progress ended up being a record low considering the past two years. This, not surprisingly, impacted the company’s revenue. According to reports, the revenue for this period was a disappointing $150m against the anticipated $158m.

Snap Inc.’s CEO Evan Spiegel responded rapidly to the concerning state of affairs, pointing a finger at the company’s rivals. “If you want to be a creative company, you need to be comfortable with, and even take pleasure in the fact that people will inevitably copy your products if they are great. Just because Yahoo! has a search box, it doesn’t mean they’re Google.”

The obvious target of his remarks was Facebook, which up until now, has “borrowed” around sixteen features from Snapchat. The latest addition to this list is the scarcely-used Stories feature in Facebook’s main app.

Despite the seemingly dreary financial report presented this quarter, overall analysts suggest that it is not a cause for major concern. There is a general consensus for stakeholders to look past this disappointing quarter and wait for the next. It is anticipated that Snapchat’s new product, the Spectacles, will steer user growth in a positive direction. As the saying goes, “it’s always darkest before the dawn”, and it appears that Snapchat’s dawn might be just around the corner.

There is no doubt though that challenges and competition from Facebook will continue to loom large. After all, let’s not forget that Facebook did attempt to acquire Snapchat for $3 billion in the past. Only time will tell how Snapchat continues to evolve and hold its own against its ever-imposing rival.