How one tweet wiped $1.3 billion off Snapchat’s market value
Value is very much in the eye of the beholder – or, more accurately, the wallet. Nowhere is this more obvious than the stock market which is often only slightly less volatile than the rollercoaster ride that is investing in Bitcoin. Case in point: last year Amazon was able to knock 13.3% off the value of Blue Apron, just by hinting that maybe at some point it might create something that resembles a rival product.
Of course, the bigger the company, the more damaging these fluctuations are. Yesterday, Snap Inc, the company behind Snapchat, lost 6.1% of its value in similarly happenstance fashion. Only, for Snap, 6.1% means a drop of £1.3 billion in value.
And just as Blue Apron’s drop was broadly down to circumstances beyond the company’s control, so was Snap’s – entirely at the whim of a celebrity: Kylie Jenner. The figure of reality TV royalty sent Snap’s shares tumbling when she mused on how she doesn’t really open the app anymore.
The answer to the slightly snobby question of “who cares what a reality TV star thinks” came back impressively quickly. Not just from the 4,000 or so replies which broadly agreed with the sentiment, but with the brutal judgement of the markets, which saw Snap shares plummeting in value:
Jenner’s tweet didn’t specify any reasons for her loss of interest in the platform – but a new redesign is causing something of a rebellion amongst its user base, which may partly explain why the tweet took off so rapidly. Indeed, analysts at Citi bank changed the company’s stock rating from “neutral” to “sell”, but it took the inadvertent economic intervention of a Kardashian to get city traders to take the guidance seriously.
And once shareholders take flight, well… even the power of a Kardashian is powerless to stop the exodus: