Snapchat’s parent company lost an estimated $1.3bn from its market value after a disparaging tweet by Kylie Jenner.
The verdict was especially damning given that Jenner was “one of the first wave of celebrities whose fame grew primarily on Snapchat,” says The Guardian.
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Shares in Snap Inc., the company which owns the photo message app, tumbled in the hours after the tweet. At one point share prices fell by as much as 8%, before closing down 6% - taking an estimated $1.3bn (£930m) off its market value.
The fallout from the tweet prompted claims that the 20-year-old reality star had “tanked” the company - despite a “damage control”-style follow-up tweet:
However, business analysts pointed out that there was another significant factor at work behind the plummet in Snapchat shares.
Citi bank downgraded Snap Inc’s rating from “neutral” to “sell” in a note to stock market investors on Thursday morning, hours before Jenner’s tweet.
The downgrade was motivated by a wildly unpopular redesign which has led users to bombard the app with one-star ratings, prompting fears of a mass user exodus.
Citi analysts Mark May and Hao Yan said that the “significant jump” in negative reviews since the redesign, “could result in a decline in users and user engagement, and could negatively impact financial results”, Business Insider reports.
BBC business correspondent Kim Gittleson posted a graph of Snap Inc’s share prices that showed a sharp plunge immediately after the release of the Citi note, followed by a second major drop-off in the hours after Jenner’s tweet.
More than 1.2 million people have signed a petition calling for the update to be reversed.
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