Snap stock soars 58% after posting profit for the first time
Investors are snapping up shares of Snap Inc. after the owner of dying messaging platform Snapchat surprised Wall Street by posting a quarterly profit for the first time.
The stock jump came on Thursday after Facebook’s parent company Meta suffered its worst single-day stock price decline in its history, showing that while internet and social media companies are sometimes lumped together by Wall Street, their fortunes often diverge.
Shares of Snap Inc. rose $14.30, or 58%, to $38.89 after hours trading. The stock, which tends to be volatile, lost nearly 24% in the regular trading session after Meta fell.
“Snapchat is clearly not as prone to the ‘TikTok effect’ as Meta, with strong daily active user growth across all regions, including North America,” said Insider Intelligence analyst Jasmine Enberg. . He referred to the decline in user growth on Facebook which is largely due to competition from TikTok, the popular video-sharing app.
Even so, Enberg added, much of Snap’s growth has likely come from India, where TikTok is banned.
Snap, which is based in Santa Monica, Calif., said Thursday its fourth-quarter profit was $22.6 million, or 1 cent per share, compared with a loss of $69 million, or 8 cents per share. , one year earlier. Analysts had expected it to post a loss of 9 cents per share in the latest quarter, according to FactSet.
Revenue increased 42% to $1.3 billion. Snap’s average daily user count also continued to grow, up 20% year-over-year to 319 million in the fourth quarter.
Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.