During its inaugural day trading on the New York Stock Exchange, in March, investors sent shares of Snap flying more than 40% above its initial public offering price of $17 per share. The company’s first earnings report, released at the close of normal trading on Wednesday afternoon, doused cold water on any remaining fervor.
In the first quarter of 2017, Snap—the parent company to social media heavyweight Snapchat—posted revenue of $149.6 million, 6% below analyst estimates. The business also suffered a net loss of $2.2 billion in the period, which included $1.99 billion in stock-based compensation.
Investors, plainly displeased with the results, sent company shares cratering by more than 20% within minutes of the 4 P.M. Eastern Time announcement. By 5:15 P.M. Snap’s stock had fallen 24% compared to Wednesday's closing price, wiping out over $6 billion of market capitalization.
Consequently, the net worths of Snapchat cofounders Evan Spiegel and Bobby Murphy fell by nearly $1.2 billion each. Each of them is currently worth an estimated $3.8 billion, according to FORBES’ real-time rankings of the world’s billionaires.
Murphy and Spiegel launched Snapchat in 2011, when Murphy was coding full-time for software firm Revel Systems and Spiegel was still a undergraduate at Stanford, where the pair had previously met as fraternity brothers. (A third cofounder, Reggie Brown, was reportedly forced out later in 2011. He filed a lawsuit seeking “over a billion dollars,” but settled for $157.5 million in 2014.)
Their social media giant, which found quick traction and easy access to more than $2 billion of venture capital funding, is now beholden to the fickle whims of shareholders. As of 5:15 P.M., Snap is trading just above its IPO price.
