Facebook Copies Snapchat Once Again – Sends Snap (NASDAQ: SNAP) Shares Tumbling Down
It's almost hard to write about Snap Inc given the troubles, albeit some of those self-inflicted - the company has gone through over the few years. What started out as a very exciting and fresh social media platform, poised for massive growth and widespread user adoption, is now getting big leagued by Facebook Inc.
Today brings another challenging debacle for Snapchat parent Snap Inc. Facebook has once again looked top the app for a feature that Snapchat pioneered years back - sending private photos and videos, which are captured directly inside the app, to a private group of friends.
The new feature found inside Facebook's (NASDAQ: FB) Instagram application is called Threads. Just like Snapchat's core functionality, Threads allows for private photos and videos to be sent to recipients natively through IG's app.
But first, let's back up and go over some of the more interesting moments we've covered in Snapchat's brief history.
- Only a single year after Snap's IPO the firm announced plans to lay off 4% of its workforce, made even worse by the fact that all of these jobs were core engineering jobs in the United States.
- In one of the worst-ever social media blunders, Snapchat ran an ad that asked users to "slap Rihanna". For those that don't know, simply Google search "Rihanna domestic violence". Short story, Rihanna was beaten savagely by Chris Brown. The celeb was outraged and announced she was quitting Snapchat all together as a result.
- Snap Inc was worth about 1/3 of its IPO price a year-and-a-half after going public, and user growth was in the negative with millions of users leaving the platform. Blame a very bad GUI update that was forced on users, an exceedingly poorly optimized android app, and most importantly the "Stories" feature that IG launched that directly copied half of Snapchat's core functionality - that of video and photo updates that disappeared after 24 hours.
- Snap shares plummeted ever further when last January the company's CFO unexpectedly jumped ship.
- However - Snap seemed to FINALLY be righting the ship with new gadgets like AR features and easy-to-access multiplayer games this past Spring. Wall Street was beginning to warm back up to the app.
Snapchat once again under siege from Facebook.
The Zuck isn't content to share any single little slice of the social media sphere and so we now have IG completing its cloning of SC. Beyond some fringe features, the core functionality of Snapchat can now all be found on IG, which boasts over 500 million daily active users versus Snapchat's ~200M DAUs.
It's hard to say if Facebook merely rolled out this feature when they completed it, or if the timing was more diabolical. Snap Inc just proudly claimed a solid 8% user gain from Q1 to Q2, so to be flying high then get hit at a time like this is especially saddening for Snap Inc and its investors.
Well Street didn't care for a very competitive Instagram application getting what's more or less feature parity with Snapchat. IG already boasts 2.5x the daily active users, and now there's very little to differentiate Snap and pull new users to its program.
Shares of Snap Inc fell by 4% today during an overall green day on the stock market that saw most other companies lifting several percentage points. In the last 7 days, Snap has fallen by a whopping 13%. Despite that drop, Snap is still up by 180% from its low of $5/share seen last December. Prices closed today at $14.30.