Reality star Kylie Jenner wiped off over $1.3 billion of Snapchat’s stock market value with just one single tweet. Jenner complained about Snapchat’s redesign on Twitter, and it seems that this tweet crashed company shares.
Kylie Jenner has over 24 million followers on Twitter. The tweet sent on Wednesday, February 21st appeared to ridicule the new redesign. Jenner alluded that the changes on the Snapchat app have made the application unusable. However, it’s not just Kylie Jenner who has raised concerns over the redesign. Investors have also been wary of these changes. A combination of all these factors appears to have plummeted Snapchat’s value. The company confirmed that shares closed 6% down on Thursday.
Snapchat’s redesign goal is to divide the content on the platform into two broad categories. The first category is “Friends” and the second is “Publishers.” This gives Snapchat the opportunity to easily promote paid content.
But this change has angered most users on the platform. A petition to revert to the old design has already attracted 1.2 million signatures. Most Snapchat users say that the changes have made the app difficult to use.
However, Snapchat feels that there is value in the redesign. In a response to the public fall out with the new update, the company said that the aim of the new update is to help people on the platform connect more with their friends and people they care about. Snapchat also acknowledged the discontent with the new changes.
The company termed the redesigned app as the foundation of great things to come, and said that more changes will happen in the near future. Snapchat also told users that their feedback is important and that the company will continue to listen to their thoughts and see how it can improve the app to meet users’ needs.
But it’s clear that Snapchat won’t go back to the original design even though the public response to the new design isn’t good and most users want it to change. Snapchat’s shares have stabilized after Jenner’s tweet but this doesn’t erase the concerns raised by investors on the new redesign.
Snapchat has millions of users and the company will need to find a balance between increasing revenue through paid content and maintaining a unique user experience. It looks like the first attempt to do this didn’t go as planned. Increasing revenue from paid content is good for the bottom line but this won’t mean anything if the number of daily users on the platform drops.
After the first tweet, Jenner followed up with a positive message for Snapchat. Kim Kardashian’s half-sister said that she still loves Snapchat despite these changes. However, the last tweet didn’t have any effect on the stock price but the events of the last few days should be a wake call for Snapchat. Prioritizing user experience over revenue should be the main goal. If this means reverting to the old design or making changes to the update, so be it.