The millennial’s social media app Snapchat announced its “earnings” Tuesday after the bell. The company uses a ghost as a company icon, since many of its messages vanish after being viewed.
The mascot has a design similarity to another infamous corporate ID, the sock puppet used by Pets.com, which can be used as the icon for the 2000 Internet bubble busting.To re-enforce the comparison Snap CEO Evan Spiegel told analysts that they are re-inventing the app in order to reach parents and grandparents just like Facebook did a few years ago.
Spiegel baffled Wall Street with his comments and the stock futures showed a 20% decline in share price.
Snapchat always leveled itself as a disruptive technology, but Spiegel is now making it disruptive towards its core users. Many of who will flee the app once the rest of the parents beginning to come on board.
Fast forward a couple of hours, the company began doing damage control on its report that revenue and monthly user numbers were well below the Street’s estimates.
Snap came out with a report the Chinese portal, e-commerce giant Tencent bought 145.8M shares of the company.
So while most on the Street have downgraded Snap on the weakness and changes of the app, shares have rebounded to only being down less than 2% on the news.
I’m convinced that this share rebound is temporary since older generations are less apt to move to a different social platform, while at the same time the company is alienating its current core users.
This is why I bring up the sock puppet as the former icon for a fabulous technological failure, this generation may have the ghost as the mascot for a vanishing market cap