Snap is getting destroyed after its earnings disaster

Thomson Reuters

Traders gather at the post where Snap Inc. is traded on the floor of the NYSE

The newly-public company plummeted 23% to $17.75 per share during the first day of regular trading following a disappointing earnings report that saw user growth slow to its lowest pace in years.

The stock is now trading just above the initial public offering price of $17. Snap also missed consensus forecasts for adjusted EPS and revenue.

But it wasn't all bad news for stock investors - short sellers are poised to make a killing on the share plunge. The day before the report, they pushed bearish wagers on the stock to the highest since Snap's March 1 initial public offering, selling a whopping $100 million short over the prior week alone, according to data compiled by the financial analytics firm S3 Partners.

It's sweet redemption for the bearish Snap speculators, who had lost $28.4 million on a mark-to-market basis betting on the company following the IPO, S3 data show.

On the other side of the ledger is Snap cofounder and CEO Evan Spiegel. Worth roughly $5 billion heading into the earnings release, according to wealth rankings compiled by Bloomberg, Spiegel is out about $1 billion following the stock decline.

As Spiegel and his Snap colleagues look to rebound, Wall Street analysts are split on whether they'll be able to pull it off.

With a price target of $14, Nomura sees Snap sliding further, citing "incrementally fierce competition from deeper-pocketed rivals including Facebook."

Pivotal Research is even more pessimistic, calling for Snap to fall all the way to $9 per share. They noted a "surprising element of seasonality" in the business, while lamenting the risk that Snap won't grow as much as the firm previously expected.

Some of the biggest banks on Wall Street line up on the other side of the Snap debate. Goldman Sachs has a price target of $27, and believes the company's "audience and engagement represent a unique asset that will benefit from growth and diversification of internet usage and advertiser adoption as both mature."

Citi shares a similar sentiment. While the firm acknowledges Snap's first earnings report will be a short-term hurdle, it sees "the low rate of monetization and the high rate of engagement enabling revenue growth and margin leverage over the long-term."