Rihanna Blasts Snapchat – $800M Erased from Snap’s Market Cap
Earlier this week Rihanna, via her Instagram story, blasted Snapchat over an ad the company allowed on its platform. The ad, in a game titled "Would you Rather", posted the question: "Would you rather slap Rihanna or punch Chris brown?"
While possibly an awful coincidence, the singer and many others allege this is in direct (and distasteful) reference to the altercation back in 2009 that involved Brown physically assaulting Rihanna - including punching, slapping, and even biting the singer. Rihanna posted a screencap on her Instagram story with an understandably outraged statement:
While this certainly counts as juicy gossip for some, we here at the Wccftech Finance department are more interested in the economic ramifications of all this drama. Snapchat (NYSE:SNAP) slid nearly 4% afterwards causing almost $800 million to be erased from the appmaker's market cap. Lucky investors that bought at the money puts with a March 16th Expiry, $17.50 strike, would have made over 100% profit if they had bought Wednesday afternoon and sold this morning.
Snapchat: When it rains it pours
We aren't even a month removed from when a similar, even more devastating incident shook Snap Inc. in the form of one of their most popular celebrities, Kylie Jenner, came out to say she was abandoning the app. Jenner commands over 22 million twitter followers and we assume her Snap following was likely massive if those numbers are anything to go by. Her remarks that she was "leaving" the platform caused the stock to slide over 7% which caused over a $billion dollar tumble off Snap Inc's market cap. Between the two celebs going on strike against the app, over $2 billion has been wiped off the market value of the company.
The timing couldn't be worse as the application recently released a much maligned "refresh" of its user interface that has quickly become infamous for how clunky and non-intuitive it is. A Change.org petition now has over 1.2 million signatures calling for the app to revert to its old UI. The company was just in the spotlight last week when it formally announced it was laying off 120 engineers as we reported here link.
The timing of all this couldn't be worse as SNAP stock was finally starting to see bullish sentiment earlier in February that saw it cresting the $20 mark for the first time since the summer of 2017. As obstacles continue to mount for beleaguered Snapchat the pressure is now on to see how they will respond. Bearish investors seem to be taking notice as $16.50 and $17, March 16th PUTS command the highest volume so far as of this writing.