There was a time, a simpler time, where pre-pubescent teens would “snap” pictures to one another, college freshman would post “snapstories” of their friends trying to eat soft-serve ice cream without dining staff noticing. Those were the days, but nostalgia isn’t enough to keep even the most popular of social media apps alive. Since Snap (SNAP), the company behind SnapChat, took a leap and went public in 2017, its been nothing short of a performance-based disaster.
During Snap’s second quarter, the company lost three million of its app-based subscribers. The company blamed the drop on CEO Evan Spiegel’s reimagining of the app, which received terrible reviews from tech experts, investors, and the application’s users. As a result of this below-par redesign, Instagram, backed by Zuckerberg and the Facebookers, passed Snapchat as the most-used social platform by teenagers, according to Piper Jaffray’s fall 2018 survey released earlier this week.
The survey discovered that 85% of teens surveyed use Instagram(FB) at least once a month, narrowly inching past reining-champ Snapchat (SNAP) at 84%. Instagram’s (FB) new redesign, compared to that of Snapchat’s, has been incredibly well-received. The platform’s new interface is structured to be simple for its users to access, whereas Snapchat users have complained about the app’s user interface (UI) being far too complicated.
In light of Snapchat’s (SNAP) mass exodus of its users to other social media platforms, Snap (SNAP) shares have hit an all-time low of $6.46 per share, representing a 60% drop from the company’s IPO of $17 per share in 2017. With the once-popular app turned camera company approaching the end of hits third quarter, investors are wondering whether Snap has what it takes to shift the tides that caused 3 million subscribers to flee.
Ch-Ch-Ch-Ch-Changes
Snap, in a desperate effort to earn the respect of teenagers once more, recently rolled out “Snap Originals,” a sort of tv-like, binge-watchable, collection of videos designed to be engaging while taking into consideration the decreasing attention span of the American pre-teen. As Snap makes its way into the content creation and video programming sphere, many are wondering if the company has any idea where it’s headed. The company, originally a disappearing-message app, now chides anyone who labels them as anything other than a “camera company.”
As a response to Snap (SNAP, and its purpose-changing app, company employees are searching for the nearest exit, largely because of the screwup of a redesign and the major drop in stock prices. Information gathered from a recent internal survey taken of the company shows that “40% of Snap’s near 3,000 employees plan on leaving the company.”
Yih Lee, a former Snap employee, tweeted in response to the company’s internal survey on Wednesday:
“It’s easy to blame a redesign, a one-time mistake in the past, but at some point, management has to take responsibility for the culture they built, the poor leadership they propped up, and the low morale they ignored.”
When the public decides that your products are an issue, but when employees complaining about leadership issues and negative workplace cultures, executives like CEO Evan Spiegel may want to take a hint.
So What Now?
Any moment now, Snap (SNAP) will release its quarterly earnings report, with shareholders waiting like sharks for a feeding frenzy. After last quarter’s 3 million subscriber drop, with company shares declining as well, Snap is in need of impressive numbers. Analysts suggest that if Snapchat’s active-user numbers decline anywhere near what happened last time, content creators, advertisers, and investors will be gone faster than the app’s messages can disappear.
Debra Aho Williamson, an analyst at eMarketer, told Bloomberg that people, in general, are “less enthusiastic about Snapchat than they used to be. They feel that they get a bigger audience and potentially better tools from Instagram, and that’s super attractive to them.” If the company’s earnings are less than ideal, Spiegel and his dastardly redesign are largely to blame.
As investors receive and review the report with a more future-oriented focus, it will be a question of whether Snap (SNAP) has what it takes to stay relevant, or will they follow the original design of their application and simply disappear.
