A couple of years ago I was hot on $SNAP’s future. Not so much any longer:
WSJ headline: Snap CEO Sees Challenges in Executing Turnaround Drive
Sub-headline: Evan Spiegel says TikTok’s level of investment in acquiring users was a surprise
Despite the near-term challenges that have caused Snap’s stock to plunge about 85% over the past year, Mr. Spiegel said he remains upbeat about the future of the business he co-founded. “I believe we’re far from reaching our full potential.”
Snap last week disclosed plans to slash 20% of its workforce because of deteriorating market conditions and sales growth that had slowed from more than 40% at the start of the year to around 8% in the current quarter to date. “We don’t see a lot of things that make us optimistic and so what we’ve had to do is really restructure our business,” Mr. Spiegel said at Wednesday’s event.
In addition to announcing it was laying off about 1,200 employees, Snap last week said it would also shut down several projects, including its recently launched flying selfie-camera drone, after posting its slowest sales growth in years in July. The company said it was prepared for a period of low revenue growth that could stretch into next year and that the changes it is making should trim annual costs by about $500 million.