Snap Co-founders Lose A Combined $1 Billion
Another earnings report, another $1 billion drop.
Snap’s quarterly earnings reports have been bad news for the fortunes of CEO Evan Spiegel and CTO Bobby Murphy. Following each quarterly earnings report since Snap –the parent of disappearing message app Snapchat – went public in March, the co-founders’ fortunes have dropped by at least a combined $1 billion in after-hours trading.
Snap’s third quarter earnings report, released Tuesday, was no exception. Snap stock dropped 16% as of 5:30 p.m. Eastern, shaving $500 million each off of Spiegel and Murphy’s fortunes to $2.9 billion each, down from $3.4 billion at the close of markets on Tuesday.
Snap missed analysts’ expectations for revenue, profits and user growth in the third quarter. User growth continues to slow, with daily active users increasing just 3% between the second and third quarter. Snap’s net loss in the third quarter was $443.2 million, more than triple what it was in the same period last year.
In August, the pair’s fortunes also dropped a combined $1 billion following a weak second quarter earnings report. At that time, Spiegel told investors that neither he nor Murphy would be selling Snap stock in 2017, despite their lockup expiring in August. Three months earlier, their fortunes dropped by a combined $1.2 billion following Snap’s first quarter earnings report.
Spiegel and Murphy are still plenty rich — they are two of just four self-made billionaires in the world under the age of 30 — but their fortunes have fallen considerably since the day Snap went public, when they were each worth $5.4 billion. As of 5:30 p.m Eastern on Tuesday, Snap stock is trading down 47% from its IPO price of $24 per share.
Spiegel and Murphy co-founded Snap in 2011 after meeting as fraternity brothers at Stanford University. Spiegel first appeared on the 2015 Forbes Billionaires List with a $1.5 billion, when Snapchat was valued at $10 billion.
Kate Vinton, Forbes Staff