Co-lead bookrunners Goldman Sachs and Morgan Stanley maintained their buy ratings on Snap and left their price targets unchanged, even after the company reported disappointing earnings that saw user growth slow to its lowest pace in years.
"The fact that they failed to live up to expectations, let alone exceed them, disappointed people", he said.
Despite less-than-stellar growth reports, the 26-year-old Spiegel was defiant and laughed off concerns that Facebook was encroaching on Snapchat's turf, a move CNBC's Jim Cramer called "so arrogant".
Similarly, average revenue per user (ARPU) was $0.90 in the first quarter, an increase of 181% over the same period past year when these revenues were $0.32.
Snap's March IPO priced above the company's target range as investors put aside concerns about a lack of profits and voting rights to get a piece of the action. Facebook had similar costs of roughly $1.3 billion. The stock dropped almost 20 percent in response to the company's first quarterly report following their IPO.
However by that time, Facebook's users were already 552 million or over three times the number of Snapchat. The company, though, has brought on others with more experience, including Chairman Michael Lynton, former chief executive of Sony Corp's movie and music businesses. As of December 31, 2016, on an average, 158 million people used Snapchat every day to Snap with family, watch Stories from friends, see events from around the world, and explore curated content from publishers. "Time will tell whether that's possible", he added.
The company attributed $2 billion of its loss for the quarter to stock-based compensation expenses related to its IPO.
Launched in 2011, Snapchat (the company rebranded as "Snap" last year) initially appealed largely to younger users who enjoyed the app's ephemeral quality: photos and short videos sent using the app disappeared automatically after being viewed by recipients. The company rebranded as Snap Inc previous year, and moved into the hardware space with Spectacles, its colorful sunglasses that record short videos to post on Snapchat.
Shares of Twitter Inc, which competes with Snap and had 328 million average monthly active users in the latest quarter, had also tumbled 24 percent after its first quarterly report. Why call when you can snap, after all? Needham & Company LLC reaffirmed an "underperform" rating on shares of Snap in a research report on Thursday. The stock's market cap is $15.71 billion.
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