79.8 billion dollars was Snapchat’s market cap at the start of this year.
19.1 billion is the current market cap.

Snapchat has lost nearly 61 billion dollars since the start of the year, which puts it as one of the worst tech stocks of 2022.

The Nasdaq is down 17%.
Facebook is down 46%.
Google is down 16%.

Snapchat is down 76%.

So what’s the problem?

1.06 billion was Snapchat’s revenue in the first quarter of 2022.
1.1 billion was revenue for quarter two this year.

Comparing that, it was 770 million and 982 million for the first half of 2021, putting revenue at an increase of nearly 650 million dollars.

User growth is also pretty solid.

332 million people are active Snapchat users.

Up 8.5% from one year ago at 306 million active users.

The bigger issue is actual profit or the lack of profit.

Snapchat lost 360 million in quarter one of 2022.
422 million in quarter two.

Total loss of 782 million.

Just to compare that, the losses for the previous years.

2021-488 million
2020-945 million
2019-1.03 billion
2018-1.2 billion
2017-3.4 billion
2016-515 million
2015-373 million

Snapchat has never made a profit one year since going public, where this year, it’ll likely see it’s biggest loss in five years.

Also, just a comparison, Facebook is a company the media keeps saying is in trouble and the stock has tanked.

Facebook made 39.4 billion in profit last year.

Facebook has been public for now ten years and has been profitable every single year.

It’s so good that the profit for Facebook in 2021 was bigger than the entire lifetime revenue of Snapchat by over 3x.

So why does Snapchat lose money?

In 2021, Snapchat announced it’d pay 1 million dollars a day to short form content creators, using a tool they made called “Spotlight”.

They paid 250 million dollars out to creators, hoping it’d bring long form returns, but not a lot of the content was good.

I know one guy who got 20 million views eating a sandwich on an escalator and made a ton of money. Most of the creators were just reposting tiktok videos and when they begin reducing the money, they bailed.

It was almost Snapchat trying to compete and dumping a quarter billion into a failed project.

That’s just one small example, but Snapchat has been investing so much money into being relevant, they can’t get any money.

The company constantly invests into AR, series, privacy and more, but just no features seem to be delivering anything that long term.

So what happens?

My gut feeling is Snapchat eventually runs out of money and gets a merger with a company like Oracle or Microsoft, who focus on making the company more profitable.