Reality TV star Kylie Jenner has knocked $1.3bn (£1bn) off Snap’s stock market value after a single tweeting that she no longer used its Snapchat messaging app.
On Wednesday, Jenner, who has 24.5 million followers on Twitter sent a tweet asking if anyone actually used the app anymore.
Celebrity Kim Kardashian’s half-sister posted: “sooo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad.”
still love you tho snap … my first love
— Kylie Jenner (@KylieJenner) February 21, 2018
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.
Snap’s shares sank after Ms Jenner’s tweet about Snapchat’s re-design to her 24.5 million Twitter followers.
However, 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.
One million people signed a petition demanding Snap roll back the change.
After dropping almost 8%, shares in Snap closed 6% down on Wall Street, and are now back near the $17 price at which the shares were listed when the company floated on the stock market in March of last year.
Whether Jenner’s snip at Snapchat was a factor in the stock drop is a subject of debate, but Bloomberg notes that Maybelline New York followed her tweet by asking its followers whether it should stay on the platform.
Jenner seemed to feel remorse for the initial tweet and followed it up with a more conciliatory message for the platform.
still love you tho snap … my first love
— Kylie Jenner (@KylieJenner) February 21, 2018
Analysis: don’t write off Snapchat just yet
Josh Krichefski, CEO at MediaCom, commented on the the power of influencers, future of Snapchat and social media more generally.
“$1.3bn wiped off Snap’s value following a seemingly innocuous tweet from Kylie Jenner highlights the sheer power an influencer can have,” Krichefski said. “With over 24 million followers, and an army of loyal fans hanging on her every word, this represents both a challenge and opportunity for brands and businesses in today’s reality TV and social media age.
“Despite falling share prices, I wouldn’t write Snap off just yet. They now have a strong ad offering with a wide range of formats, measurement partners and a solid user base. But there are other causes of concern. The switch to an auction-based media buying system last year has been great for advertisers and has allowed media agencies to optimise to lower costs to reach audiences, but that won’t have helped grow Snap’s revenue.
“What’s more, the beloved ‘Stories’ format alongside the lenses and filters which had been Snap’s breakthrough USP ad product is now no longer unique to them; Instagram took on this model and made it easier for family and friends to do this on their existing social platform with their established friends or family base. What will be interesting is how long it will take Snap’s share prices to return to normal in this tinder box industry.”
Can improved viewability metrics save Snapchat?
Yuval Ben-Itzhak, CEO of social media experts Socialbakers, recognises that while the Snapchat redesign was a step in the right direction, the changes have massively backfired and losing the support of an influencer like Jenner is a significant blow
“Wall Street seems to be keeping up with the Kardashians as Kylie Jenner’s comments consolidate an already poor year for Snap Inc.” Ben-Itzhak said. “While Snap’s app redesign announcement last year was definitely a step in the right direction, offering marketers increased personalisation and relevance, the changes to the platform have backfired spectacularly. Snapchat needed to make sure they maintained the quality and relevance of their content, especially as they try to size up to competitors such as Instagram. Unfortunately, over a million people, and counting, disagree with the changes to the app, based on the popular online petition. A drop in quality takes users’ attention elsewhere and Snapchat is currently facing that challenge.
“Despite the improvements made on the platform towards the end of 2017, Snapchat’s ad product offerings also need to improve to measure up to its competitors. They need to offer improved viewability metrics for marketers if they want to increase their ad revenue and be successful moving forward. Snapchat will continue to face a huge growth barrier in 2018, and Jenner’s comments have added yet another speed bump. The platform can’t afford to lose influencers like Jenner especially in a time where influencers are playing such a key role in marketing. Ultimately, the lack of reach and user backlash that hangs over Snapchat remains a limiting factor for marketers looking to leverage the platform’s full potential. Additionally, all of this coming at a time when the CEO sold $50M in stock may not help investors believe the situation with Snapchat is going to improve.”
View this analysis from BBC journalist Ben Thomspson below:
When is a tweet worth $1bn? When it's from reality TV star Kylie Jenner. Her tweet wiped $1.3bn off value of Snapchat last night – here's why. @BBCBreakfast @BBCBusiness pic.twitter.com/jzLSBkmVUe
— Ben Thompson (@BBCBenThompson) February 23, 2018