Snapchat is not a company. You may not have known that when you clicked on this article. That beautiful yellow and white app that we use, and this author is included, has a parent company that struggles to live up to its IPO. They have become a company that everyone watches, but they are not worth watching at the moment. We often use social media passively because we do not realize how much other companies offer that have been copied or improved after Snapchat released it.
They are the barometer
The word barometer gets thrown around a lot when business analysts watch and predict.
They use certain companies to judge how others will fare, and SNAP has been used as a barometer for small social media companies who want to compete with Facebook. They have done well in the past, but they are failing after their IPO. They have expectations to meet, and there are reasons why Snapchat is losing ground.
Snap has not upgraded fast enough
Everything that Snapchat did well in the past has been copied by Facebook and Instagram. The majority of young people tend to use all three of these apps and more, and the instant picture with message feature on Snapchat has been copied by Instagram in their stories feature. Facebook does the same now through their messenger, and the company was much larger than Snap to begin with.
The companies that were once pressed by Snapchat are simply not afraid anymore, and Snapchat has not had any new ideas to use in retaliation.
The market gets jittery
Economists and analysts who are watching companies such as Snap get jittery the moment they realize that Snap is not living up to their predictions. Economists and investors will begin to back off the stock if they think it will begin to lose value precipitously, and they will not come back until Snapchat recovers.
However, Snap cannot recover until they have regained the confidence of investors. The company is one good idea away from a resurgence, and they are one bad idea away from the vultures coming out to ask how much the company is worth.
A growing user base
The growing user base at Snapchat is not enough for investors. They make their predictions based on how many different people are supposed to sign up for the app, but Snap has not met that expectation.
A lack of growth indicates a potential loss of value to investors, and they will back off until snap finds a way to add more people to their rolls. Snap can come back, but they need to jump in front of the competition.
