According to analysts of Wall Street research firm, the Snap, the parent company of snapchatMay need to close your capital if you can not better ways of monetization and keep users longer on the social network.
The company began to publicly trade its shares in March 2017, but lost $ 20 billion in market capitalization. Since then, the Snap struggle to attract new users to its platform.
Brian Wieser, senior Pivotal Research Group analyst, said CNBC that the data are observed in the survey showing a user base increased, although the platform of the time use is being reduced collectively. “Our view is that it is not too late for management to find ways to reverse the recent usage trends and improve monetization”.
Also according to Wieser analysis, the Snap is unable to achieve these two objectives in the short term, the company may become an attractive candidate for investments with the share price at current levels.
With strong competitors such as Facebook and Instagram, Snapchat has invested in advertising, which has troubled the user's social network, as well as the new design was implemented in February.
The analyst Michael Nathanson, the MoffettNathanson, last Tuesday (9), wrote that the company was not prepared for the opening, reducing 2019 revenue estimates by 7%.
Wieser also makes an interesting observation: companies that sell digital advertising such as Snap, Facebook and TwitterThey are impacted by low barriers to competition and government regulations related to the privacy of its users.
Source: CNBC