Snap opened at its lowest ever levels Wednesday, a day after a crucial earnings miss.

Shares opened at $11.30, more than 20 percent off its Tuesday’s close of $14.13 — and 19 cents lower than the stock’s previous lowest open.

The company behind popular disappearing message app, Snapchat, warned investors that its revenue growth rate would “decelerate substantially” in the subsequent quarter, dragged lower largely by weaker ad revenue.

Snapchat ad prices — excluding its Story ads — dropped 65 percent year-over-year in the first quarter after the company switched to an automated “programmatic” auction-based system from of a direct sales method.

Snap is also reeling from an unsuccessful redesign of its Snapchat app — and analysts are predicting more pain ahead.

The redesign has “created a number of challenges, which may prove difficult to overcome,” Evercore’s Anthony DiClemente wrote in a note — especially as Snapchat faces increasing pressure from Facebook and Instagram’s lookalike features.

The overhaul, announced in November and rolled out in subsequent months, separates paid publisher content from user content. The change has dinged ad revenue, relegating publisher content to an entirely separate and largely avoidable section of the app.

Snap has more recently hinted at reversing some of those changes, following complaints of a confusing and cluttered interface and difficulty finding celebrity posts.

As of Tuesday’s close, Snap was up nearly 4 percent since announcing the redesign, but 40 percent of its 52-week high.

“Internet companies demonstrating revenue reacceleration tend not to meaningfully underperform in the following quarter,” DiClemente said. “Unfortunately, SNAP’s 4Q reacceleration in trends — and associated 4Q post-earnings stock pop — proved only temporary.”

—CNBC’s Michelle Castillo contributed to this report.

Source: Tech CNBC
Snap sees its lowest open ever after warning investors of 'decelerating' ad revenue