Snapchat is Indebted to Celebrities

In recent weeks, Snapchat has found itself in hot water with a few celebrities. While this may not seem like a huge issue to most companies, the growing tech app has seen massive losses due to comments made by some of today’s biggest celebrities. Two recent incidents have caused Snap Inc. to lose over $1 billion dollars.

The first incident occurred in mid-Feburary when Kylie Jenner made comments that she did not like the new Snapchat update (Yurieff, 2018). Her simple tweet on the issue is seen here:

This may seem like harmless tweet to some, but this tweet alone caused Snap stock to drop over 6% in one day, bringing the company down $1.3 billion (Yurieff, 2018). Additionally, a petition on change.org was started and garnered over 1.2 million signatures to have the app’s updates reversed (Yurieff, 2018).

While Snapchat has been recovering from this issue, another hotly contested incident occurred this week. See below ad ran on Snapchat’s platform this week:

Many users, including Rihanna, found this post to be wildly offensive considering her violent history with domestic violence and former partner Chris Brown (Valinsky, 2018). The singer was quick to send out a message to her followers explaining the situation and her discontent with the app’s approval of the message. See her below response:

Snapchat did respond to the ad and made two formal apologies to Rihanna and victims of domestic violence (Valinsky, 2018). Many people, including Rihanna however, do not feel that this apology is sufficient as this ad did need to go through a long approval process, yet somehow still made it on the app (Valinsky, 2018). Since this incident and Rihanna’s comments, the company’s stock has dropped nearly $800 million (Valinksky, 2018). Additionally, it is estimated that Snap’s CEO Evan Spiegel’s net worth has dropped almost $150 million in just two days (Berg, 2018).

Snapchat is not the only company to face severe financial declines due to celebrity comments, however they are a great example of just how much influence celebrities can have on companies. Our society is one that largely revolves around those in the pop culture spotlight, and this can be seen even in the companies they choose to associate with. Snapchat is learning this the hard way, but other companies should take notes on this in order to avoid the same losses.

References:

Berg, M. (2018, March 17). The Rihanna Effect: Snapchat CEO Evan Spiegel’s Net Worth Drops Nearly $150 Million In Two Days. Retrieved March 17, 2018, from https://www.forbes.com/sites/maddieberg/2018/03/17/the-rihanna-effect-snapchat-ceo-evan-spiegels-net-worth-drops-nearly-150-million-in-two-days/#87dd122ca091

Valinsky, J. (2018, March 16). Snapchat loses $800 million after Rihanna responds to offensive ad. Retrieved March 17, 2018, from http://money.cnn.com/2018/03/16/technology/snapchat-stock-rihanna/index.html

Yurieff, K. (2018, February 23). Snapchat stock loses $1.3 billion after Kylie Jenner tweet. Retrieved March 17, 2018, from http://money.cnn.com/2018/02/22/technology/snapchat-update-kylie-jenner/index.html