Did a Kardashian influence an 8% drop in Snapchat’s share price?

A tweet from Kylie Jenner (from the Kardashian clan) saying “sooo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad” is being credited as the catalyst for an 8% drop in Snap* Inc’s share price.

While the price clawed back 2% that same day, and Jenner softened her commentary with another tweet saying, “still love you tho snap … my first love,” the effectiveness of Snapchat’s strategic direction had already been judged by its own social media jury.

With the release of a software update, the share price of Snap rose to a high of US$20.75 (from US$14.06).

Negative feedback on the update saw the share price go into a gradual decline – Jenner’s tweet however accelerated that into a much sharper decent.

It’s common for businesses to work through a list of external influencers and stakeholders to manage risk.  That list has traditionally included such things as:

  • Government regulation;
  • Location;
  • Competitors; and
  • Changes in the marketplace.

Nowadays, the cycle of impact of external influences has become much shorter.

When an influencer has 24.5 million followers on Twitter, anything she says penetrates faster than mainstream media.

Jenner’s Snapchat commentary attracted over 300,000 likes and over 64,000 comments.

Whilst it is ironic that a Kardashian dropped the share price of a product that has been her rocket to fame, it demonstrates the speed at which trend-based businesses can rise and fall.

Remember Pokemon? Nintendo went from its core user base to a world-wide trend. After rising to massive heights in 2016 the use of Pokemon has declined rapidly.

The lesson is to have a strategy to capitalise on the trend and sustain it for as long as possible, and never forget your core client base – your core still needs to be there when the trend is over.

Jimmy Choo credits Princess Diana’s stylish influence as a catalyst for taking the brand from simply beautiful to desirable – a trend that has not significantly diminished. Kaftan designer Camilla became globally recognised after Oprah Winfrey wore her colourful designs. And, when Kate Middleton wears a Topshop outfit it sells out almost immediately.

The problem for businesses whose products become a trend is that trends go both ways – exponential growth and sharp decline. You are either in the spotlight or you’re not.

* Snapchat’s parent company