Things are not looking good for the application Snaphat or Snap Inc, it’s parent company. After a wildly unsuccessful redesign earlier this year and a report of shares falling 15% in the first quarter, the service is struggling to keep up with the aggressive competition. Snapchat stock has taken a steep dive, with shares plunging from the original $27 when Snap Inc went public last march to a mere $13. A spokesperson for BTIG suggests that ‘sentiment on the stock is horrible’, strong words that express foreboding on the fiscal future of the application.
Arguably, one of the main issues Snapchat faces is the bare-faced co-opting of its model by other services. The ‘stories’ function, allowing users to post a series of short videos and images that refresh after 24 hours, has been adopted by tech giants like Facebook Messenger and Instagram to great success, pushing Snapchat further into the hole of dwindling fame. Messenger’s stories function reached 450 million daily users this year, while Snapchat flounders at a decidedly less impressive 190-200 million.
However, not all the blame can be placed at the feet of competitors. Following the aforementioned redesign in March, users were bombarded with software issues and a confusing interface, with content from personal friends and contacts mixing indiscriminately with sponsored content. Although much of the more troublesome issues with the redesign were smoothed out in a later update, users are still left with much to be desired in other services- and arguably, Snapchat is driving them there. As for the market, Snapchat stock seems unfit to recover any time soon.
It is because of this dive in daily users that has lead experts to lower their revenue estimates for the company by up to fifteen percent. However, there is much in the way of future evolution to be suggested, with third-party agreements being made with developers such as Pandora and Amazon’s Tim Stone joining as CFO. At the end of the day, only pleasing its users will pull Snapchat out of its slump, and hopefully drag it out from under the shadow of its competitors by the end of the financial year. SNAP is expected to report earnings for the quarter ending in June tomorrow.