Source: Google Finance
Snapchat has been under fire recently for a post which was making a joke out of domestic violence. Last week, a snapchat story was posted asking whether they would slap Rihanna or punch Chris Brown. Rihanna's response was not great, as you can imagine. She basically told her huge fan base to "throw away" the app. Since Rihanna posted that apparently Snapchat's stock has now gone down immensely, losing $800 million in market value. People were already questioning whether to continue to use the app because of the new update, which already lost them many users.
Analysis: People were already upset over the update and I think this drew the line for them. I don't think it was okay of Snapchat to do this, but I don't think it was intended to be malicious. Even though, I don't think many domestic abuse victims will keep using it, personally I don't think Snapchat will be going away any time soon just because some people will continue to use the app.
Questions:
Do you guys think Snapchat will regain their stock value?
Will you guys stop using snapchat because of this?
14 comments:
I don't think that Snapchat will be able to regain their value anytime soon. They have received complaints from two famous people. When Kylie Jenner complained about the update, Snapchat lost 1.3 billion. But now with a domestic violence joke, I feel like things got even more serious because whether or not you're a follower of Rihanna, people still take this issue seriously on their own. Honestly, I don't think I'm going to stop using snapchat anytime soon either. It's definitely not my favorite app out right now, but it's definitely a go-to when i am bored. I hope snapchat apologizes for this "joke."
I can't say whether or not they will regain their stock value anytime soon because there are a number of ways their stock price can go within the next few days/weeks, especially for a popular company. However, I will say that I wouldn't recommend investing in the company solely because the risk is way too high. In today's society, a social media app as commonly used and as widespread as Snapchat has a public image that they need to maintain, which, in some ways, correlates with their stock. Celebrities, like Rihanna and, as Marlene mentioned, Kylie Jenner, can simply influence this with a couple of words, which is a major threat for the company. Despite this, I would still use Snapchat simply because it's a creative way to socialize with friends.
The domestic violence joke will definiely stain Snapchat's reputation, but for a lot of teens it's the go-to app for photo sharing, plus all the filters and other added options. Personally, I don't see my time spent using Snapchat changing at all, and I feel that the stock value will rebound eventually. The only other popular alternative right now is Instagram.
I honestly think it's ridiculous that Rihanna's single comment could force her followers to stop using Snapchat. Many Snapchat users hold streaks with their friends, and therefore many would be unlikely to stop using the app immediately, for it would hinder communication with their friends. In terms of stock value, Snapchat definitely needs to make an update that will better satisfy its customers. I myself am not pleased with the format of the new update, and I believe it was a cause for Snapchat's falling stock.
I agree, and am not sure if it will regain stock value soon. However, although many people complain about the update, they still continue to use it. They have been under fire lately because of Kylie Jenner and the new update. I feel like snapchat as an app will slowly decrease in usage, just because it is a trend that will pass.
However, I don't think Snapchat is at fault completely. They allow other companies like Buzzfeed, Cosmopolitan, Food Network, etc to post stories on the Stories Feed. Snapchat most likely gets paid when companies post on the feed, so they probably have low regulations on the content of the stories. I agree that Snapchat should have reviewed the story before the company posted about domestic violence, but it is difficult for them to regulate due to the high volume that gets posted on the app daily.
As any business, Snapchat will do fine, they have too large a user base to fall too far. However, I have my own reasons for being disgruntled with the app. The new update prioritizes advertisements, on the right from center screen. This allows snapchat to make way more money because of ad revenue. So do they care that they are losing use base? No. Because they are making all that money back though adds.
Snapchat's controversial update seemed to be designed to maximize revenue per user rather than the total number of users. I think the risk of this business strategy is social media's reliance on the number of users. Relative to a competing company like Facebook's Instagram, Snapchat is at risk due to the lack of comparative advantages. The huge drop in the company's value was a sign of this, however even if Snapchat removed all the ads, there still remains a doubt as to if people would even bother to come back.
I don't think snapchat is going to keep decreasing. I think that this outrage is going to be temporary and people will eventually go back to using it. I don't think what they did was okay, but they are like most social media. They tried to joke about something that was not funny and people took it badly and I don't think they will ever do this again. They probably just did it for publicity. I personally will not stop using snapchat. I don't agree with what they did but they are just worried about making money just like any other business.
Snapchat is likely to regain their stock market value in the future... if they make some serious changes. I think they first would have to start by removing the horrible update which scared off so many Snapchat users. Also, I think an apology to Rihanna and all Snapchat users is necessary because while their intentions with the post may have not been malicious, domestic violence is nothing to joke about. Despite this, while many people have stopped using snapchat, I don't think the app itself will necessarily die out completely right away. I personally don't really use snapchat anymore but still have the app on my phone in hopes that they'll someday remove the update. Overall, things aren't looking good for the company but they def. have the potential to get back to the good place they were in.
The kind of business that snap chat has is about as reliable as music media business. Sometimes you get lots of money than the next day you don't get any money at all, it's not exactly a stable business considering all it takes is a few clicks and they loose millions of dollars. I don't use snap chat all that much to be honest. I agree with Alexa that I don't think that the site will die but, they will if they keep something like this up and if they don't do some overhauls to what they do.
I don't think Snapchat will recover what they have lost in their stocks. The complaints made by social media models would cause a long lasting negative effect. People who don't even follow those people can still choose to stop using it because of the inappropriate joke. I, myself, haven't used Snapchat that much, and the amount I will be using it will probably not change, but rather stay as stagnant as it had been before.
It is likely that their value will remain down for a long time, especially because of the unfavorable changes they have made that many users do not like. Not only have they made tasteless and demeaning jokes, the updates themselves have caused people to turn away from the app. Like all other social media, it will eventually fall out of flavor. The internet is still very volatile and teenagers don't often stick to one thing too often. Just as the emergence of Instagram caused many to switch from Facebook, it is not too absurd to think that a new app will cause people to switch from Snapchat, especially given how they've been managing themselves lately.
I think while the domestic abuse post was very bad, Snapchat will at some point recover slowly and overall be fine. Its got such a large amount of people who use it that even with a celebrity like Rihanna who has a huge following can't bring the whole app down. But if they keep allowing post like the domestic abuse one go on their stories and not change their format to something more of its users like, then their recovery will take a longer time.
I don't believe snapchat will regain its original IPO value of 27.00, but I do believe that snapchat is one of those stocks that one should look into if they are day traders. Few months ago, I purchased 500 shares of snapchat at around 12-13 dollars and make a cool 3 grand off it after it peaked again at 20.00+. For me, I don't care if snapchat is under fire for doing wrong things. As long as I am making money off this company, I am happy. Its not my business to criticize what snapchat is doing wrong. Im only in it for the money. If it ain't about making money, I am not interested.
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