Instant shares disappear with two million users

(Reuters) – Snap Inc (SNAP.NShares plummeted 14% after the Snapchat owner recorded its second consecutive quarter of user losses and expected further declines, giving Facebook Inc. a boost.FB.O) Instagram before its results next week.

At least four Wall Street analysts reduced their price target as Snap's heavily criticized redesign continued to weigh on the number of daily active users, particularly in Europe and the United States.

Revelation for teens and more than twenty years around the world when its post-disappearance model was launched in 2011, the growth in the number of users of Snap has slowed in the last two years, while Instagram mimed its best features .

In the third quarter, its 186 million users compare to more than a billion of the application owned by Facebook.

JP Morgan and RBC Capital Markets halved their Snap equity targets.

"We think that Instagram is much more penalized by this demographics and it will be difficult for Snap to hijack Instagram users," writes JP Morgan analyst Doug Anmuth.

Shares of the company fell 12.2% to 6.14 dollars before the bell.

A redesign earlier this year aimed at restarting the app caused a brutal reaction led by famous users, notably Kylie Jenner, who threatened to boycott the photo messaging application.

"Some users may leave the platform because it has lost its novelty, which would prove to be a bigger concern in the long run," said Brian Wieser, an analyst at Pivotal Research Group.

The number of Snap SADs has decreased by five million since the first quarter, mainly due to the deployment of the Android application.

Brent Thill, an analyst at Jefferies, worried that these losses would spread until 2019.

Snap shares fell more than 50% this year, while Facebook, hit by the fallout of the Cambridge Analytica privacy scandal, lost about 14%.

Of the 36 analysts who cover the stock, 16 are now rating it and 13 are selling it or less. The median share price is $ 10, down 15% from the previous month.

Analysts said that the number of active advertisers on Snapchat, although small, has risen steadily. However, the social media application is always at the mercy of its number of users.

"While monetization trends in the third quarter are promising, we do not believe the stock can recover until the user base has returned to solid growth," said Canaccord Genuity's Michael Graham.