Social media influence and reality TV star Kylie Jenner tanked Snap’s stock value with one tweet about Snapchat.
On Wednesday, Feb. 21, Jenner posted a tweet saying she is not using the app anymore, and her 24.5 million followers were quick to comment on her sentiments. Jenner made no mention why she stopped using the platform – it might have something to do with her motherhood or it could be the app redesign. Whatever Kylie’s reason might be for not using the app, her tweet attracted not just her followers but also Wall Street.
Jenner’s tweet gained so much traction that Snapchat shared dropped about eight percent and the company closed down on six percent. At the end of the day, the stock prices for Snap was trading for $17 -the same price it had when it was originally listed on the stock market.
Earlier in the week, Citigroup gave Snap a sell rating and they revealed that the decision to downgrade the stock was because of the backlash against Snapchat’s redesign.
Snap stocks have been struggling ever since Snapchat introduced the major redesign in November of last year. However, shares were still up by 18 percent.
Chantico Global CEO Gina Sanchez explained the implications of Jenner’s tweet to CNBC. According to her, Jenner’s comment which targeted the major redesign that allows Snapchat to monetize the platform could put Snap stocks in hot water.
“[But] of course the group that uses it, which is the 18-to-24-year-olds, they’re going to hate that. They have the attention span of a gnat. I think it’s going to be challenging because they’re going to have to move into an older group and I’m not sure that’s going to work. I think that’s a risk.”
Matt Maley, an equity strategist, also relayed his thoughts on this matter. At $17, Snap shares are not necessarily in trouble, but if prices sink lower, it might have a negative implication on the company.
Earlier in February, Snapchat received a petition from users who complained about the redesign they rolled out back in November. Back then, Evan Spiegel commented that users only need time to get used to the changes.
As revealed by BBC, a million people signed the petition asking Snapchat to bring back the original format because they find the layout harder to use. Users found the changes annoying, adding that the features defeated the original purpose of the social media platform.
Kylie Jenner is merely expressing the sentiments of these users although it might have had a negative effect on the company’s stocks.