Following news that Snap Chief Executive Evan Spiegel unveiled new strategic goals and acknowledged shortcomings with a recent design of its app in a memo, the social media company’s shares fell by 0.7 percent on Friday (October 5). The most recent decline comes as the stock has plummeted by roughly 47 percent year-to-date, CNBC reported.
“In our excitement to innovate and bring many new products into the world, we have lost the core of what made Snapchat the fastest way to communicate,” Spiegel wrote in the document, calling the update “rushed.” (The company is testing a Discover section design that highlights celebrity and professional company accounts.)
And, on Thursday (October 4), the stock fell 5.2 percent following a note from Evercore ISI that said Instagram is “irreversibly reducing Snap’s opportunity to deliver on long-term investor expectations.” On the news, shares of Snap dropped to a record low, which CNBC said was $7.56 per share at approximately 1 p.m.
Backlash to the Snapchat redesign continued to depress user figures in the second quarter of 2018. But Snap Inc. still beat analyst expectations in its latest financial report in August. The news boosted the company’s share price by as much as 11 percent. Daily active users declined 2 percent year over year in Q2, to 188 million.
“This was primarily driven by a slightly lower frequency of use among our user base due to the disruption caused by our redesign,” Spiegel said during the post-earnings conference call. “It has been approximately six months since we broadly rolled out the redesign of our application, and we have been working hard to iterate and improve Snapchat based on the feedback from our community.”
Snapchat’s daily active user base increased 8 percent quarter over quarter. Average revenue per user hit $1.40, a 34 percent year-over-year increase from Q2 2017. The company also reported other areas of growth as it competes against Facebook-owned Instagram and other platforms. “The number of people that watch Publisher Stories and Shows on iOS every day has grown by more than 15 percent this year, and we are excited to bring the learnings from our iterations on iOS to our Android application,” Spiegel said.