When Snap Inc., the parent company of the popular social media app SnapChat, announced that they were going public, it was generally assumed that they would do well. However, early results state the opposite.
Since their IPO (initial public offering), after a surge in prices coming out of the gate, the company has seen a significant drop in the price of their stock. The company offered stock at $17, but prices quickly jumped to $24 per share. Despite currently being about 20 per cent below their highest price, CNBC says Snap Inc. is still doing better than they thought.
Snap Inc. seems to have a few ideas ready to bolster stock prices. Their most ambitious undertaking is, surprisingly, not a new feature on their app. On March 10, the company opened a store on the Venice Beach Boardwalk California for the sale of their much anticipated Spectacles. The glasses look like a standard pair of sunglasses but come with built-in equipment to allow the user to take a 10 second ‘snap’ and send it directly to their SnapChat account.
Previously, anyone who was lucky enough to be around could buy a pair of Spectacles from a travelling vending machine that appeared around the US in random locations. Snap Inc. has since made the product available on their website for $130 to anyone in the US. The company had previously opened a brick and mortar shop for the product in New York, but the store has since closed. There is still no word on whether the new Venice Beach location is intended to be permanent.
Snap Inc. stock problems are not new in the world of social media. Earlier this year, Twitter announced that they would be shutting down their Vine app, another short video tool that allowed users to make incredibly short videos and have them play on a loop. Contrary to that, SnapChat’s videos are either directed to a specific person or remain available on a user’s ‘story’ for only 24 hours.
Facebook, high profile rival to Snap Inc., recently released a SnapChat-like update to their popular Facebook Messenger app. It allows users to post photos with captions to their ‘day’ and share them with friends. While the new feature does not yet allow users to apply ‘filters’ to their photos, like the ones on SnapChat, it does include an extensive library of ‘stickers’ with which to decorate your photos and videos.
This development from Facebook may discredit some analysts suggestions that, for the right price – one analyst, Shelby Seyrafi, says about $14 a share, or about $20 Billion —Facebook would attempt to bring Snap Inc. into the Facebook fold as it has done in the past with Instagram and Whatsapp. In 2013, Facebook had attempted to buy Snap Inc. for $3 Billion due to a decline in engagement from younger users.
To find out how well Snap Inc. is really doing, interested parties will have to wait until their first quarterly report which should be available sometime next month.