That little ghost logo may be an omen of sorts.
Are Snap Inc.’s finance coming to the end of their rope? This is the question posed by a recent report by the Financial Times, which analyzed the social media company’s financial reports for the past two years. Based on the analysis, the future looks pretty dim for Snap; if it continues to bleed $68 million per month as it already has been since its IPO in 2017, it could theoretically “run out of cash in three years unless it turns a profit.”
The decline in Snap’s revenues could be attributed to its numerous problems encountered since 2017, the first of which was its hugely unpopular platform redesign. Snap immediately tried to fix its major blunder, but by that time, the public was already moving on to newer, similar apps that offered the same features, such as Instagram and its Instagram stories.
The Financial Times is hoping that Snap could turn this around by not changing anything anymore on the site. According to the news company, fees or advertising are easy streams of revenue for tech companies in the short run. However, if we’re talking about long-term, it’s the “richness and delights of the user experience” that can benefit the company more than anything.
Aside from the problems that Snap has with its platform, it’s also experiencing problems within the company itself. In fact, around 20 executives have left the company since its IPO in March 2017.
“We believe 2019 remains a pivotal year for the company as it launches its rebuilt Android app globally, as its self-serve ad platform gains scale, and as the organization stabilizes after multiple executive departures,” said investment bank JMP Group earlier this month in a note to its clients. “While we are encouraged with the company’s new products and services, and our checks suggest engagement is improving, which bodes well for advertising growth, we think execution risk remains.”
