Shares in Snap, the parent company of social media service Snapchat, dropped by nearly a quarter on May 10th after the app reported a loss and slow user growth.

Snap reported a $2.2 billion loss for the first quarter of the year, its first set of results since becoming a public company. But while the company was expected to report a heavy loss, investors were disappointed by slower-than-expected user numbers. The number of daily Snapchat users increased by 36 per cent year on year to 166 million, down from 47 per cent growth in the previous quarter. It signed up 8 million users in the last three months, fewer than analysts had been expecting.

Snapchat, which allows users to send temporary photo and video messages to one another, is hugely popular among teenagers and young adults.  But investors are concerned that Snapchat’s growth will stutter as Facebook targets the service’s audience with its similar Instagram app.

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