NEW YORK (CelebrityAccess) As Snapchat’s shares plummeted, costing the company $800 million, after a criticism by Rihanna, one investor said this could be a good time to invest in the app.
“This can drive more people to the platform,” Jefferies analyst Brent Thill told Business Insider. “It creates more curiosity.”
Snapchat had a really bad Thursday. The company had run a third-party ad that appeared to make light of domestic abuse, and it was called out by Rihanna on social media. The ad asked, “Would you rather slap Rihanna or punch Chris Brown?,” a reference to Brown’s 2009 attack on his then-girlfriend.
That led the singer to post the following on Instagram:
“Now SNAPCHAT I know you already know you ain’t my fav app out there,” she wrote Thursday morning. “But I’m just trying to figure out what the point was with this whole mess! I’d love to call it ignorance but you know I ain’t that dumb! You spend money to animate something that would intentionally bring shame to DV [domestic violence] victims and make a joke of it!!! … Shame on you. Throw the whole app-oligy away.”
— Nicollette Williams (@nicollettemw) March 15, 2018
SNAP stock dropped 4 percent that day, equivalent to $800 million in equity. It could be a coincidence but it follows a tweet by Kylie Jenner on a day the stock dropped by a significant amount.
“Sooo does anyone else not open Snapchat anymore?” Jenner asked. “Or is it just me … iugh this is so sad.”
The stock dropped 7 percent. Jenner later returned to the platform.
Snapchat apologized for the advertisement and pulled it.
Thill said the bad news could spur people to use the app, maybe just to see what the fuss is about, according to Business Insider. He added that he doesn’t think negative headlines will have a material impact on ad revenue and, in the long term, “the more these platforms can do to get rid of the controversy, you’ll have a better environment for advertisers and users.”
He said Snap could become “a more proven platform” like Facebook and “can actually take some share in the short-term.” Advertisers are “like portfolio managers on Wall Street. They don’t want to bet on one horse. They want to diversify ad platforms.”
SNAP shares are up nearly 18 percent so far this year.