Snapchat Stock Falls After Kylie Jenner’s Tweet
Kylie Jenner’s Tweet Might Have Just Cost Snapchat $1.3 billion In Market Value
In this digital age, a social media post can make or break a brand’s image all in a matter of minutes. Kylie Jenner’s latest tweet lamenting how Snapchat has lost its lustre since its new update is a case in point.
On Wednesday, 23rd February, Jenner posted the tweet asking her followers, “Sooo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad.” The comment received 74, 000 retweets and 345, 000 likes from her followers, all echoing the same sentiments. Immediately the next day, Snapchat’s market value plummeted 6.1 percent, wiping out $1.3 billion.
On top of the massive user backlash in the wake of the rollout of Snapchat’s redesigned app over the past few months, Kylie Jenner’s tweet though not the cause was likely the straw that broke the camel’s back. More than 1.2 million people have signed a petition on Change.org called “Remove the new Snapchat Update.”
The Power Of Celebrity Endorsements In The Digital Era
While celebrity endorsements have been a popular marketing strategy for decades, the Internet has become a major medium of communication that has emboldened a new era of digital advertising and marketing led by the hoards of influencers and celebrities and their formidable following.
One of the main goals of celebrity endorsements is to increase product sales, but the best endorsement agreements also often boost stock prices. Having the rich and famous back a product or service have proven to occasionally have the Midas touch on Wall Street.
According to a white paper from the Harvard Business School and Barclays, stock value of products and brands endorsed by sports stars experience discernible increases, especially following their major successes after winning a championship or medal.
The paper found that there was a small but statistically significant increase in share price on the day of the announcement (0.23%) and further boosts when the athlete achieved success. Though the jump in stocks in relation to the specific athlete is only temporarily, the stock returns remain relatively constant.
The authors concluded that, “when it comes to the impact of endorsers’ athletic achievements, such performances significantly and positively impact the endorsed firms’ stock prices.”
Nevertheless, having the largest viewership on Snapchat, the media savvy Kylie Jenner’s massive influence could very well turn things around for the social media platform just as quickly. Despite Jenner’s tweet she was back on snapchat hours later with her new born baby. It would be interesting to watch this play out, whether or not the Queen of Snapchat chooses to spin this to her advantage and capitalise on the current media frenzy to widen the Kardashian’s entertainment empire.