Snap Stock explodes by 25%, increasing founders’ fortunes by more than $ 2 billion and also raising shares of rival Facebook
After beating expectations in its second quarter earnings report, Snap shares soared Thursday night and opened 18% more on Friday from the previous day’s close. As of 1:30 p.m. ET on Friday, the stock was up 24%.
The fortunes of founders Evan Spiegel and Bobby Murphy increased by more than $ 2 billion each. Spiegel, who is CEO, owns 13% of the social media company; his net worth had increased by $ 2.8 billion by early Friday afternoon. Murphy, the chief technology officer, owns 15%, increasing his net worth by $ 3.1 billion.
As an early indicator of how digital advertising is performing on social media platforms, Snap’s surprise results also supported its competitors. Facebook shares rose 7% on Friday afternoon, boosting Mark Zuckerberg‘s fortune by nearly $ 8 billion. Facebook will release its quarterly results next week. Likewise, Pinterest shares jumped 6% and Twitter’s by 5%, creating more modest net worth bumps for Ben Silbermann (up $ 220 million, to $ 4.4 billion) and Jack Dorsey. (up $ 150 million, to $ 14.7 billion).
Now trading at an all time high, Snap’s stock reflects the strong quarterly results Spiegel delivered to investors on Thursday. Revenue from April to June hit $ 982 million, the company’s best, more than double the same period in 2020. Snap also cut its net losses by more than half compared to the same quarter in 2020 , growing from $ 326 million to $ 152 million, while increasing its number of users. 23% base to 293 million people.
Snap, which was losing users in 2018, regained its innovative edge thanks in part to the focus on augmented reality (AR). Today, it promotes itself as a “camera company” and claims that over 200 million users use its AR features daily, which often involve camera filters that distort a person’s face or feature. the environment. The next step for tech: enabling users to shop virtually through Snapchat, using AR to try on an item of clothing. “Brands really needed to find a replacement for malls and showrooms,” Snap’s chief commercial officer Jeremi Gorman said during the earnings call Thursday.
Spiegel and Murphy co-founded the company as Snapchat in 2011, after meeting at Stanford University, where they were students. They renamed Snap in 2016 and went public the following year, when they established the Snap Foundation, a nonprofit, philanthropic organization to which they pledged to donate 13 million of their shares. during their lifetime. Murphy donated 287,000 shares to charity this year; Spiegel donated 1.6 million shares, according to filings with the Securities and Exchange Commission. However, it is not known how many of those actions went to the Snap Foundation – Spiegel, for example, also has its own philanthropic vehicle, the Spiegel Family Fund, which focuses on the arts, education, housing and rights. image with focus on California.