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It’s been a (really) rough year for Snap (SNAP).

Shares of the social media company are down a staggering -57% from their February highs. According to Hedgeye Internet & Media analyst Hesham Shaaban, the company is struggling to monetize its users.

He’s been bearish on SNAP since April 2017.

In the clip above, Shaaban explains that Snapchat users are not being exposed to advertising in the “Discover” section of the app. Instead, users are almost exclusively using the chat and “Snap” functions.

“It’s great to have all of these users and this amount of time on platform,” Shaaban explains.

“But ultimately there is a cost here because Snap ultimately has to pay those hosting costs. They can’t effectively monetize [users] because they’re hanging out in a section of the app which has inherently less ad inventory.”

Watch the full clip above for more.

Snap Has a Growing Problem (And Yes, We’re Still Bearish) - investing ideas