November’s redesign of the Snapchat app led to the displeasure of majority of the app’s users. This was validated when reality TV star Kylie Jenner tweeted “So does anyone else not open Snapchat anymore? Or is it just me... ugh this is so sad” on February 21 to her 24.5 million followers on Twitter.
The Kylie Jenner Snapchat tweet, caused the parent company, SNAP, stocks to close down 6% on February 22. Jenner being one of Snapchat’s most influential users stated that she was no longer using the app. The plunge in the market eroded nearly $1.3 billion from Snapchat’s market value. Jenner followed the previous tweet with another one, “still love you tho snap... my first love".
"We believe this is an overreaction as Wall Street is hypersensitive to the app redesign," Daniel Ives, CEO and head of technology research at GBH Insights said. "With roughly 25 million followers, Jenner carries a loud mouthpiece that speaks to today's knee jerk reaction in shares."
He also said that the design update was necessary to expand the user base of the app. He said the move was right, but has to be processed well.
While Jenner made headlines for single-handedly dealing a blow to Snapchat with a single tweet, there are other factors responsible for the company stock plunge. The tweet may have merely pushed it over the edge.
The new redesign was greeted with a lot of negative reactions post its launch as the app was called ‘confusing’, and ‘hard to use’. 1.2 million Snapchat users signed a petition on change.org demanding the app revert to its previous user interface. Even before the update, Snapchat was faltering, having had an uneven fiscal year due to competition from Instagram after they rolled out Instagram stories.
Predictions loomed in mid-2017 that Facebook, that owns Instagram, would put Snapchat out of business. The company’s profits fell further that quarter. Final quarter earnings were surprisingly better and the stock went up by 25% as users reacted to the new design.
While all these factors together laid the groundwork for the eventual plummeting of the tech giant’s stocks, Kylie Jenner’s tweet acted as a final nail in the coffin.
Snapchat is set to make additional changes to its app in the coming future. They announced an update making it easier for users to view the content they want to see. It also plans on rolling out tabs in the Friends and Discover section of the app to make finding Stories easier for the users. These ‘stories’ are the videos and photos that users share with their followers which disappear after 24 hours.
Interesting, another celebrity also tweeted their displeasure over the app’s redesign. Model Chrissy Teigen tweeted “How many people have to hate an update for it to be reconsidered?".