Snap said DAUs fell by a wider-than-expected margin in the third quarter
The shares of Snap Inc (NYSE:SNAP) are spiraling in electronic trading, after the Snapchat parent's quarterly earnings results were met with a round of bearish brokerage notes. At last check, SNAP stock was down 13.2%, on track to open at a new record low of $6.20.
For the third quarter, Snap reported a slimmer-than-expected adjusted loss of 12 cents per share on higher-than-anticipated $298 million in revenue. However, the social media name said daily active users (DAUs) for the three-month period fell to 186 million from 188 million in the second quarter, and arrived below the expected 187.56 million. Plus, Chief Financial Officer Tim Stone warned in a conference call that DAUs will likely decline in the current quarter, too.
The brokerage bunch has been busy in the wake of Snap's earnings report. While J.P. Morgan Securities downgraded SNAP stock to "underweight" from "neutral," it halved its price target to $6. Canaccord Genuity, Jefferies, and RBC also weighed in, lowering their respective target prices on the stock to $8.
Today's projected plunge would be more of the same for Snap stock. The shares have shed more than half their value year-to-date, based on last night's close at $6.99. And while the security is currently up 2.6% week-to-date heading into today's trading, this gain will likely be evaporated today -- putting SNAP at risk of bringing its weekly losing streak to a stunning 16!
Against this backdrop, bears have blasted Snap stock. The weekly 10/26 7-strike put has been especially popular among options traders, with 26,351 contracts currently outstanding. Those who bought the options are likely set to profit handsomely, should this morning's premarket price action pan out.