When Snap Inc hit the public stock market in March, it was just the latest in a long list of booming tech IPOs. Two months later, it’s already skipped the treading-water phase, and appears to be heading for a full-on Twitter-style meltdown.

After posting a $2.2 billion loss in its first set of public earnings yesterday, Snap’s stock nosedived. As of the close of trading today, it’s at $18, 20% lower than the $23 asking price before yesterday’s earnings.

As you’d expect, all of Wall Street’s finest analysts are wasting no time weighing in. CNBC has a roundup of some of the best, and there are some real quality quotes in there. “[Snap] now faces incrementally fierce competition from deeper-pocketed rivals including FB, and continues to trade at a valuation that looks quite lofty to us, even considering yesterday’s aftermarket selloff,” Anthony DiClemente of Nomura Instinet said. Calling a company’s valuation “lofty” after the shares drop 20% is strong language from an analyst.

Ross Sandler of Barclays said that “The 7m DAU [daily average user] net-adds were not strong enough to disprove the “Facebook Is crushing Snapchat” thesis, which we think persists for a while.” Competition from Facebook, mostly via Instagram, which it owns, is one of Snapchat’s biggest problems.

Instagram, Whatsapp and the main Facebook have all spent the last year studiously ripping off Snapchat’s key features. Most obvious is the adoption of “Stories” in Instagram, Facebook Messenger and Whatsapp. Users don’t really care who designed a feature first — they’ll use whichever is most convenient, and right now, that’s Instagram. Facebook CEO Mark Zuckerberg recently revealed that Instagram already has 200 million users on Stories every day, which is more than Snapchat’s entire monthly userbase.

Even worse, from Wall Street’s perspective, is that Facebook has a proven and successful business model. By collecting data on users, offering it to advertisers, and then serving ads right on the platform, Facebook can offer serious value to advertisers, and take in major revenue. Meanwhile, Snapchat is struggling to find a way to monetize its platform other than simple display ads and dubious content partnerships.

There are still some people optimistic about Snapchat’s stock, though. Goldman Sachs and Credit Suisse, the two banks that helped Snapchat go public, still have a stock target price of around $30.

 

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