Snap Inc. Isn't the Next Twitter -- It's Much Worse

When Snap Inc. (NYSE: SNAP), the company behind the wildly popular Snapchat app, went public in March, the overarching question was whether Snap would be the next Facebook (NASDAQ: FB) or the next Twitter (NYSE: TWTR). Facebook has grown during its five years as a public company into a technology behemoth, with a valuation nearing $500 billion. Over the past 12 months, Facebook has generated $33 billion of revenue and an astounding $13 billion of net income, driven by its more than 2 billion users.

Twitter, on the other hand, has struggled. The stock has tumbled nearly 80% from its peak late 2013, and it's down nearly 70% since the beginning of 2015. Twitter's pie-in-the-sky valuation at the time, coupled with performance that has failed to inspire, led to this massive destruction of wealth. Twitter's revenue is now in decline, stuck around $2.5 billion, and the company is posting net losses of nearly $500 million each year.

Shares of Snap are already down 46% from their peak just a few months ago. User growth is slowing, costs are exploding, and the company doesn't seem to be able to combat Facebook's relentless copying of Snapchat's core features. Snap looks a lot like Twitter, in other words, and not a whole lot like Facebook.

Source: Fool.com