*By Michael Teich*
Snap couldn't convince enough new users to join its troubled platform in the first quarter of 2018, and there will be no recovery for the company's stock as long as the current management team remains in control, said Michael Pachter, an analyst from Wedbush Securities.
Shares of the social software company plummeted Wednesday, a day after it delivered quarterly results that seriously disappointed Wall Street. The social media company added just 4 million daily active users from the previous quarter, falling short of the 7 million estimate. The stock responded quickly, and closed down almost 22 percent on Wednesday.
Pachter said competition, an unattractive platform redesign, and Snap's inability to appeal to older users were among the top reasons for its sluggish growth. “Anything Snap comes up with, Facebook will copy and they'll be more effective at it,” he said.
Despite the negative sentiment on Wall Street, Snap still claims 191 million daily active users. Snap's CEO Evan Spiegel acknowledged in an earnings call that the redesign was a drag on revenue and caused "apprehension" among advertising partners, but he emphasized users are still spending over 30 minutes per day on the app.
Pachter, who gives the stock a "neutral" rating and a $10 target for 12 months, said he is resisting giving Snap a "sell" rating because, at some point, "somebody will buy" the company.
The Energy Department is making a push to strengthen the U.S. battery supply chain, announcing up to $3.5 billion for companies that produce batteries and the critical minerals that go into them.
Ed Egilinsky, managing director and head of sales and distribution & alternatives with Direxion, joined Cheddar News to discuss how bond traders are reacting to the latest consumer price index data and how they're positioning portfolios ahead of next week's release of Nvidia's earnings. Egilinsky also discussed some of the other bigger-cap companies, including Alphabet, Amazon and Apple.
Facebook and Instagram will require political ads running on their platforms to disclose if they were created using artificial intelligence, their parent company announced on Wednesday.
Arturo Béjar testified before a Senate subcommittee on Tuesday about social media and the teen mental health crisis, hoping to shed light on how Meta executives, including Zuckerberg, knew about the harms Instagram was causing but chose not to make meaningful changes to address them.
Uber missed analysts' projections for earnings per share and revenue this past quarter. Cheddar News takes a closer look at the numbers and explains what to expect for the rest of the fiscal year.
