Snap Inc. (NYSE: SNAP)

On Tuesday, February 6th, 2018, Snap Inc. reported their fourth-quarter earnings after the market closed for trading at 4 pm. As has been the case recently with companies that have beat Wall Street estimates, shares soared as soon as the news came out.

Shares, which closed the regular trading session at $14.06 which was up $0.21 on the day wound up closing up 21.41% at $17.07 or $3.01 as of 8 p.m. Eastern Standard Time. It is likely that the shares saw a huge increase on the news even though the company did not post pre-adjusted actual earnings, but merely beat loss expectations, there is a huge short interest in the outstanding share float.

That currently stands at 14.3% of outstanding shares sold short. This means a large number of shares have been sold before they have actually been purchased. It allows speculators to sell first and buy later hoping shares fall for them to buy back lower.

The Numbers

The company reported a loss of $350 million dollars or -$0.28 per share. This compares with losses of -0.20 cents per share in the year-ago period. However, after adjustments are made earnings came in at $0.13 per share.

Revenue’s rose tremendously from $165 million a year ago to $285 million this quarter. Analysts were expecting a loss of -$0.15 per share. This explains why the shares bolted much higher on the news.

The main reason given by the company for the stellar revenue numbers was the fact that daily active users have risen dramatically since the previous quarter.

Company & Analyst Comments

Chief Executive Officer Evan Spiegel had this to say to investors;

“Our business really came together towards the end of last year. We executed well on our 2017 plan to improve quality, performance, and automation, which removed friction from our advertising business and improved our application for the Snapchat community,”.

Analyst Daniel Ives of GBH Insights had this to say  these statements;