Snap (NASDAQ:SNAP) stock rose sharply overnight on solid earnings, positive guidance, and hope that banning TikTok will win market share in the social media space.
Snap , on revenue of $1.19 billion during the March quarter. But revenue was up 21% and there was free cash flow of $38 million.
Snap has a TikTok competitor called Spotlight. The company said in its earnings release that Spotlight traffic has in the last year.
SNAP stock was due to open this morning at $14 per share, with a market capitalization of nearly $23 billion.
Snap Back?
Investors have been ignoring Snap for years as it lost ground to Meta Platforms (NASDAQ:META), Twitter (now X) and especially TikTok. The stock has lost one-third of its value in 2024. In 2021, SNAP traded at about $80 per share.
But Snap still has 422 million active users, and that’s from last year.
A ban on TikTok signed by President Joe Biden gives Chinese owner ByteDance one year to sell out or close. This has also given Snap investors .
Efforts to sell TikTok during the Trump administration failed. TikTok wound up signing with Oracle (NASDAQ:ORCL), which might now bid for it. Former Treasury Secretary Stephen Mnuchin recently said he was to buy it.
But ByteDance says than sell it. That could mean 170 million users and up to $14 billion in ad dollars looking for a new home.
Even without the TikTok news, Snap reported and a strong outlook. Enhancements to the site are drawing small advertisers. Bulls see the possibility of a breakout to $15.50 per share.
SNAP Stock: What Happens Next?
Snap also has a chatbot called . There may yet be life in the social media stack.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
