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Snapchat shares plunge as user growth slows

By John-Paul Ford Rojas, Business Reporter
Shares in the owner of Snapchat have fallen sharply after a redesign of the messaging app turned off fans and advertisers.
Snap was down by 16% in after-hours trading on Wall Street after a big slowdown in the rise in daily active users in the first quarter to the end of March.
These rose by four million to 191 million, compared with the 8.9 million increase seen at the end of 2017.The figure fell short of expectations, helping push shares below $12 and extending a slide in the price since February when it had climbed close to $21 on hopes that the redesign was working.Snap reported a net loss for the quarter of $385.8m, though that was much smaller than the $2.21bn loss reported a year earlier.Revenues rose 54% year-on-year to $230.7m, missing Wall Street targets, and there was a warning that revenue growth would slow substantially in the second quarter.The update suggested that Snapchat still faces a tough battle after its overhaul, designed to fend off the threat of larger rivals such as Facebook.More than a million people have signed a petition urging the company to remove the update.Debra Aho Williamson, analyst at eMarketer, said: "The redesign didn't just make users unhappy, it also made advertisers more concerned.
"That's not a good position to be in."Snap executives acknowledged that the new design - which keeps content from friends separate from other publishers - was hurting results.But they are sticking with the plan which they say believe will propel growth in the long run.Chief executive Evan Spiegel said: "The redesign lays the foundation for the future of both our communication products and our media platform, and we look forward to doubling down on both."He added that, as previously warned, "a change this big to existing behaviour comes with some disruption".
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The app has not been helped by the reaction of celebrities such as Kylie Jenner, whose disparaging tweet about it in February sent shares sliding.It has also separately been criticised by pop star Rihanna over an ad which she said shamed victims of domestic violence.
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