According to a recent report, Snapchat’s parent company, Snap Inc., is running out of money. The company’s CEO, Evan Spiegel, set a goal of profitability for 2019, but in order to reach that goal, Snap will likely need to raise capital in a hurry as soon as the middle of next year.
Cost cuts are planned in order to facilitate the company’s rapid growth. Revenue estimates have been lowered, and the price target for Snap has been lowered from $8 to $6.50. Overall, a loss of $1.5 billion is expected as the company rebuilds its user base, due in part to increased pressure from Facebook’s Stories format.
Since the announcement of these projections, the company’s stock has also fallen by 4.1%. Snap has not yet commented on the falling stocks.
