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Why Snap Is Now One of the Most Hated Companies on All of Wall Street

In the matter of an hour on Wednesday evening, Snap Inc. (SNAP) managed to make itself one of the most hated companies on all of Wall Street. 

Here's the very simple explanation on how it managed to pull off such an amazing feat. First up is a complete loss of faith in the company's business model and outlook (and subsequent losses in the stock). Coming into the much-hyped Snap IPO, Wall Street was questioning whether the company deserved such a ludicrous valuation. After all, it never earned a lick of money, and Facebook (FB) was moving fast into Snapchat's playpen. Yet, Wall Street bought into the hype knowing full well the first year as a public company for Snap could be horribly ugly for a litany of reasons. Now, institutions will have been taught a financially painful lesson after a first quarter that was thoroughly embarrassing in terms of raw data and delivery by the executive team. 

Snap's stock crashed 22 percent in trading Thursday to $18.05, wiping out almost all of the gains from the $17 a share IPO. The company only added eight million daily active users in the quarter, for a sum of 166 million, with growth from a year ago cooling to 36%. Sales of $149.6 million also badly whiffed vs. estimates for $158.6 million. As icing on the cake, Snap lost $2.2 billion. To be fair, almost $2 billion of the loss was tied to stock compensation costs from the IPO. Even so, not pretty to the eye for one of the hottest tech IPOs ever.

Read more at The Street

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