Why Shares of Momo Inc. Are Plunging Today

Why Shares of Momo Inc. Are Plunging Today

Shares of Chinese mobile social networking platform provider Momo Inc. (NASDAQ: MOMO) tumbled on Tuesday despite an overwhelmingly positive second-quarter report. The company beat analyst estimates across the board, and its guidance for third-quarter revenue was well ahead of expectations. A lofty valuation may be why investors are selling off the stock. At 11:50 a.m. EDT, Momo was down about 18%.

Momo reported second-quarter revenue of $312.2 million, up 215% year over year and about $26 million higher than the average analyst estimate. Live video service generated $259.4 million of revenue, up from $57.9 million in the prior-year period, driven by 4.1 million paying users. Value-added service revenue rose 58% to $24.6 million, mobile marketing revenue grew 15% to $19.0 million, and mobile game revenue jumped 23% to $9.1 million. Companywide monthly active users totaled 91.3 million, up from 74.8 million one year ago.

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Source: Fool.com