Coverage: Kylie Jenner wipes $1.3 billion from Snap’s market cap
Shares of the Snapchat parent company Snap Inc. sank 6.1 percent on Thursday, wiping out $1.3 billion in market value, on the heels of a tweet on Wednesday from Kylie Jenner, who said she doesn’t open the app anymore.
Justina Vasquez of Bloomberg News had the story:
Jenner’s tweet was followed late Thursday by one from Maybelline New York, asking its followers if it should stay on the Snapchat platform. The beauty-product brand owned by Paris-based L’Oreal SA said its “Snapchat views have dropped dramatically,” but it still wanted to connect with its followers.
Citigroup analyst Mark May downgraded the stock to sell from neutral earlier this week after seeing a “significant jump” in negative reviews of the app’s redesign. He expects the reviews could cause user engagement to fall, hurting financial results.
Meanwhile, as the app takes criticism, Chief Executive Evan Spiegel may become one of the highest paid executives in the U.S. After the company’s IPO last March, Spiegel got a $636.6 million stock grant that will be payable through 2020.
“Still love you tho snap,” Jenner hedged in a later tweet.
David Pierson of the Los Angeles Times reported that Snapchat is also reeling from a redesign:
The redesign was supposed to make Snapchat more approachable to new users, but it’s been the subject of a backlash from its existing audience, highlighted by a change.org petition with over 1.2 million signatories.
“With the release of the new Snapchat update, many users have found that it has not made the app easier to use, but has in fact made many features more difficult,” read the petition, which was started by a user named Nic Rumsey.
Jenner perhaps feels the same way (representatives for the star did not respond to a request for comment).
The celebrity, made famous from her family’s reality show, “Keeping Up with the Kardashians,” tweeted Wednesday: “sooo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad.”
Minutes later, she tweeted: “still love you tho snap … my first love.”
David Moye of The Huffington Post reported that the decline may have just been a coincidence:
On Thursday, the stock price of Snap, Snapchat’s parent company, fell about 6 percent closing at $17.51. That represented a $1.3 billion loss in value, according to CNN Money.
To be fair, the timing of Jenner’s tweet and Snap’s decline in value may just be a coincidence. Citigroup downgraded the stock on Tuesday because November’s Snapchat redesign has alienated many of its users, according to TechCrunch.
“While the recent redesign of its flagship app could produce positive long-term benefits, the significant jump in negative app reviews since the redesign was pushed out a few weeks could result in a decline in users and user engagement, which could negatively impact financial results,” Citi’s Mark May said in a statement.