Snap Inc (NYSE:SNAP) shares have fallen by a huge 23 percent in after-hours trading. The stock fell to $17.66 and $6 billion (£4.6 billion) was wiped off the group’s market value.
“The fact that they failed to live up to expectations, let alone exceed them, disappointed people,” said BTIG analyst Richard Greenfield.
Snap missed out on the Wall Street Estimates after struggling to compete with rival apps, such as Facebook, copying Snapchat.
“If you want to be a creative company, you’ve got to get comfortable with and enjoy the fact that people are going to copy your product if you make great stuff,” said Snap Chief Executive Evan Spiegel.
“Just because Yahoo has a search box doesn’t mean they’re Google.” he added.
Investors are worried that Snapchat will continue to falter as Facebook (NASDAQ:FB) continues to target the app’s audience. Both Instagram and Whatsapp, owned by Facebook, have copied many of Snapchat’s features recently and has already surpassed Snapchat in daily users.
Snapchat had eight million new users in the past three months but this was much less than analysts expected.
Shares in Twitter (NYSE:TWTR) and Facebook also slid after they posted debut scorecards. Facebook shares tumbled 11 percent, while Twitter shares fell by 24 percent.
Not all bad news however for the picture messaging app. Snapchat a 286 percent increase in revenues, as the group’s advertising operation increased rapidly. Snap’s sales were up $38.8 million from a year ago – at $149.6 million in the first quarter of 2017.
Snapchat’s growth was also faster than Facebook. Its overall daily user base increased by 18 percent year-over-year in the first quarter of 2017.
During an earnings call, chief executive Evan Spiegel, sought to reassure worried investors. He spent the morning answering questions that ranged from strategy to how it would deal with competitors.