Snapchat stocks (NYSE:SNAP) are tumbling to around -8% today after the firm released a series of announcements including a new redesign of its user interface. It follows a previous revamp which Snapchat began rolling out late last year, only to be met with months of user complaints.
The latest update should see certain aspects of Snapchat’s layout reverted to the way it was before last year’s redesign, including the navigation of friends’ “stories”. Indeed, consumer reactions to the update were so bad that an online petition on Change.org to undo the update garnered over 1.2 million signatures.
So why are stocks falling? It would make sense that shareholders see an improvement to the Snapchat service as a step towards more secure investment potential, especially in direct response to user suggestions. What’s more, the firm is projected to rake in $1.4 billion in advertising revenue in 2018, which is a two-fold improvement on 2017, market analyst Debra Aho Williamson told CNBC.
Yet Snapchat stocks are currently down -7.17%, bringing per-share price to $14.51 USD and the firm’s market cap to $17.8B.
>> Spotify Adds More Benefits to its Free Service – Users Will Love It; Investors Don’t
It is possible that Snapchat is following Twitter’s (NYSE:TWTR) downward trend as investors grow wary of social media shares in general. Twitter is down -4.96 today at the time of writing, despite releasing a positive first-quarter earnings report. Rival giant Facebook (NASDAQ:FB) is currently in the green at 0.39%, though this is a recovery from a sharp dip this morning. But it is also important to note that two of Snapchat’s recent announcements are essentially re-tries of developments that failed last time they were released, and investors may be wary of the firm’s ability to learn from its mistakes.
Snapchat is to announce information this week about a new version of its wearable technology product dubbed Snapchat spectacles, according to technology news site Wired. The glasses will be another step by the firm into the notoriously difficult augmented reality (AR) wearables market. In fact, when Snapchat released the first version of its spectacles in 2016, the firm was met with pretty firm disinterest, ultimately reporting a $40 million loss in order cancellations and excess inventory.
>> Snapchat’s Share Value Drops After Its Tasteless Ad – Rihanna Speaks Out
In addition, the firm has also announced Snappables – AR games that allow users to compete with their friends via Snapchat. Using the front camera, users will have to make use of touch, motion, and facial expressions to score points.
With three fairly major announcements in less than two days, Snapchat shareholders have had a lot to take in. Looking at it that way, it’s less of a surprise that some investors have taken a step back from the firm to see how things turn out in the coming days and weeks. It’s likely that reception to the layout redesign-redesign is going to be the main factor behind Snapchat’s stock performance in this time, though consumer reaction to the new spectacles will probably play a part as well.
If at first, you don’t succeed…
Featured image: The Verge
