Snap's value drops $1.3B on Kylie Jenner tweet
Snap’s stock price fell 6.1% on Thursday, erasing $1.3 billion of market value, after reality TV celebrity Kylie Jenner said she doesn’t use image-sharing app Snapchat anymore, according to a report from Bloomberg. The “Keeping Up with the Kardashians” star sent a tweet to her 24.5 million Twitter followers that said, “Sooo does anyone else not open Snapchat anymore? Or is it just me...ugh this is so sad.”
Jenner’s tweet went instantly viral on Twitter, racking up 315,000 likes, 60,000 re-tweets and 4,200 comments in 24 hours. She softened the initial blow with a later tweet that said, “still love you tho snap…my first love.” But the damage to Snap’s stock was done as the shares dropped as much as 8.5% before recovering some of the loss.
Jenner’s tweet was followed by one from Maybelline New York that asked its followers if it should stay on the Snapchat platform. The tweet, which was later deleted, had said its “Snapchat views have dropped dramatically,” but the cosmetics brand still wanted to connect with followers.
Kylie Jenner’s disparaging tweet about Snapchat isn’t the most expensive message ever shared on Twitter (President Trump still has that record), but it does show the power of social influencers to move markets and to speak for millions of people. The 20-year-old Jenner, who has appeared on “Keeping Up with the Kardashians” since 2007, is right in the middle of Snapchat’s key demographic of young adults and teens that are hard to reach through other social platforms like Facebook. When she blithely suggests that Snapchat isn’t cool, Snap executives should worry. Snapchat delivered some good news earlier this month in the form of strong user growth and ad sales growth for Q4, but Jenner's tweet shows one quarter of good results isn't enough for a successful turnaround. (Jenner last year hosted a Snapchat show called "Ask Kylie" produced by the E! Network.)
Many of the responses to Jenner’s tweet complained about Snapchat’s redesign that was rolled out this month. The new version was intended to make the app easier to use by putting one-to-one messages and the hugely popular Stories feature in the same place on the app. Stories is a way to broadcast a single post to an entire group of friends and followers, and each post also can contain multiple images. In the former version of Snapchat, those Stories were found in the Discover section that mostly has articles and videos from media companies. However, a social influencer like Jenner with millions of followers still has her Stories featured in the Discover section.
CEO Evan Spiegel is right that the new version of Snapchat is easier to use, and that the app doesn’t have the “pressure of likes, comments and permanence” that characterizes Facebook, Instagram and Twitter. But those meager rewards encourage people to check into social media more frequently, driving viewership and ad sales. Whether Spiegel’s ideal of creating “new alternatives for self-expression,” as described in a post on Axios, can survive the unforgiving judgment of the marketplace remains to be seen.
“Despite falling share prices, I wouldn’t write Snap off just yet," Josh Krichefski, CEO at MediaCom UK said in a statement emailed to Mobile Marketer. "They now have a strong ad offering with a wide range of formats, measurement partners and a solid user base."
Despite some positive signs for Snap, there are still areas of concern, according to Krichefski, who pointed to revenue challenges generated by the switch to an auction-based media buying system and Snapchat losing its uniqueness as its features continue to be copied.