Snap reported its quarterly earnings today and disclosed some mixed results. The company beat on revenue–hitting $262.3 million, compared to the $249.8 million Wall Street expectation–and it beat on EPS with a loss of 14 cents, compared to an expected loss of 17 cents.
But Snap missed on one extremely important metric: daily active users. Analysts expected 193 million DAUs–which is a drop in the bucket to Instagram’s 1 billion monthly active users. And Snap didn’t even hit that. The company reported only 188 million DAUs, its first-ever decline.
Despite this miss, the stock is currently rallying in after-hours trading. It’s currently up over 10%.
This bump may be because Prince Alwaleed of Saudi Arabia announced that he invested $250 million to get a 2.5% stake in the company.
إستثمرت ٩٥٠ مليون ريال سعودي لاتمام صفقة شراء حصة بنسبة ٢,٣٪ في شركة سناب شاتhttps://t.co/XXOgEvEB2W
— الوليد بن طلال (@Alwaleed_Talal) August 7, 2018
According to his post announcing the stake, this is part of the prince’s strategy to invest in innovative technology. Similarly, Saudi Arabia’s sovereign fund bought a significant stake in Tesla earlier today. I guess it’s a big day for Saudi investments.
Despite the Prince Alwaleed news, analysts haven’t been too thrilled with Snap’s performance over the last year. BTIG’s Rich Greenfield wrote earlier today that “excitement around the Snapchat platform has quickly evaporated.” He points to Instagram’s “Story” dominance, as well as Snapchat’s recent redesign stumbles.
We’ll have to wait and see if Prince Alwaleed’s investment will have a long-term positive effect on the company, or whether the slump will continue tomorrow.