Snap shares rally after CEO Evan Spiegel targets profitability in 2019

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Snapchat co-founders Bobby Murphy (l) and Evan Spiegel (c) ring the opening bell on March 2, 2017, as NYSE President Thomas Farley looks on.

Snap shares rallied sharply Friday morning after it was revealed that chief executive Evan Spiegel said in a memorandum sent to employees he wants the company to turn profitable in 2019 and issued a slew of new strategic goals.

The struggling stock gained 4.3 percent in premarket trading, set to pare a year-to-date loss of more than 46 percent as of Thursday’s close.

The CEO also lamented the company’s recent app redesign, which drew outcry from users and contributed to the company’s first decline in daily active users in the last quarter.

“In our excitement to innovate and bring many new products into the world, we have lost the core of what made Snapchat the fastest way to communicate,” Spiegel wrote in last week’s memo.

He also said the update was “rushed” and detailed other problems with the app.

When reached, a Snap spokesperson declined to comment. Cheddar first reported on the memo.

Snap is trying out new designs for its Discover section, which showcases professional companies and celebrity accounts. He also explained challenges the app faces from competitors and from growth.

The stock sank 5.2 percent Thursday after Evercore ISI said growing competition from Facebook’s Instagram is “irreversibly reducing Snap’s opportunity to deliver on long-term investor expectations.”

The stock hit a new all-time low following the Evercore note and fell as far as $7.56 per share shortly before 1 p.m. ET.