Snapchat Inc. (NYSE: SNAP) has been taking a lot of hits recently, from Kylie Jenner $1.3 billion “does anyone else not open Snapchat anymore?” comments to “Would you rather” game featuring Rihanna and Chris Brown.
The ad, which was created by a third party cost Snapchat $800 million as well as a 4% plunge in stock price. Since its IPO Snapchat has been one of those lacklustre performing company that should only be used a trading play rather than be considered an investment option.
Let’s not kid ourselves, Snapchat is not the new Facebook (NYSE: FB) or Instagram, of which both of these social networks have already added Snapchat’s most notable features into their platform while maintaining their domination of market share.
Rihanna who has over 61 million followers, responded to the offensive ad – would you rather “slap Rihanna” or “punch Chris Brown”, “You spent money to animate something that would intentionally bring shame to DV victims and made a joke of it!!!” she posted on her Instagram story.
Following the post, Snapchat apologised for the ad that referred to the Rihanna assault by then-boyfriend Chris Brown in 2009. But is the damage done?
If there is any confusion about how powerful market sentiment is, consider this exhibit A.