Kylie Jenner’s Snapchat shun shows “financial fragility” of social media
US celebrity Kylie Jenner yesterday wiped around $1.3bn (£900m) off the market value of Snap.
She did so by using another social media platform, namely Twitter.
Snap shares fell around seven per cent after Jenner tweeted: "So does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad."
While she tried to backtrack on the comments later by saying Snap was still her "first love", make-up giant Maybelline fanned the flames by saying Snapchat views had dropped dramatically.
sooo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad.
— Kylie Jenner (@KylieJenner) February 21, 2018
— Daniel Roberts (@readDanwrite) February 23, 2018
John Illsley a director at accountancy firm Moore Stephens said: "This underlines the fragility of social networking platforms from a corporate finance perspective. It is easy to forget just how young these businesses are."
One of the oldest social media platforms is Facebook, which was formed in 2004, Illsley said.
The value of many of these social networking brands is usurped by the value of its high-profile users, rather than the product or service they provide – and this is dangerous for their value.
The furore surrounding Jenner's tweet came days after Citi analyst Mark May downgraded Snap after noting a "significant jump" in negative reviews of the app's redesign.
Snap shares failed to make significant ground as Wall Street trading kicked off this afternoon. Shares popped in opening salvos but are currently 0.31 per cent up at $17.41 a share.