Did Kardashian clan member Kylie Jenner just burst open some Wall Street wallets?
As Snapchat users have been piling on complaints over the platform’s redesign, the 20-year-old makeup entrepreneur added her own grievance to the mix.
In a tweet Wednesday, Jenner revealed that she no longer opens the Snapchat app.
“Soo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad,” she tweeted out. That follows a Feb. 9 missive on Twitter in which Jenner said “I don’t know how i feel about” the redesign.
Still love you tho snap … my first love
— Kylie Jenner (@KylieJenner) February 21, 2018
Then, hours later on Thursday, shares of Snap fell as much as 7% in trading—helping the company shed over $1 billion in market value, bringing its total market cap to about $22 billion.
It’s not hard to imagine why Jenner’s tweet could affect the price of Snap’s stock. Jenner, at least as recent as 2016, was the most viewed person on Snapchat “by a long shot.” Snap did not respond to requests from Coins2Day to confirm whether that’s still the case.
“Snap is doing the right strategic moves but needs to manage this process well as celebrity influences like Kylie are a key ingredient in the company’s recipe for success,” said Daniel Ives of GBH Insights in an email. “With 25 million [Twitter] users she carries a lot of weight.”
Interestingly enough, while Jenner tweeted at 4:50 p.m.—after market hours—Snap’s stock remained relatively unchanged. It wasn’t until the markets opened Thursday morning that the stock really began its slide in earnest.
That delayed response may have been as a result of how many eyeballs the tweet garnered—and when.
“The Tweet did not go viral until late last night in the U.S. With an explosion of re-tweets and newly generated comments as both tweet volume and negative sentiment exploded into the market open today,” said Joseph Gits of Social Market Analytics, a firm whose data trawls for information in social media sites, which is in turn used by major investors to inform their investing decisions.
Algorithms may have also exacerbated the selloff today.
Increasingly, major investors are using information gathered from major social media sites as a way to trade, programming algorithms that buy and sell stocks at least in part based on social media sentiment. And as negative sentiment grew—the algorithms sold. And then as Snap’s price fell, other algorithms programmed to contain investor losses also deepened the selloff.
Though it wasn’t all Jenner that fed into the stock’s losses.
“Sentiment on Snap has been negative every day but one since Feb. 10,” said Gits.
Discontent over Snap’s redesign has been simmering for a while. An online petition against the change has garnered over 1.2 million signatures.
Adding fuel to the fire is a Wall Street note form Thursday that reiterated the negatives of owning shares of Snap and Twitter. That note came from MoffettNathanson, a boutique firm focused on media companies. The note, which appeared in the early hours Thursday, helped (perhaps ironically, given Jenner’s use of the platform to declare her graduation from Snap) bring shares of Twitter down by roughly 2%, while the tech-heavy Nasdaq Composite rose 0.8% to 7,277.
According to the boutique firm’s founding partner Michael Nathanson, investors have gotten a little too excited in recent weeks over the two potential turnaround stories. That comes after both Twitter and Snap pleasantly surprised their bullish investors earlier this month with quarterly report cards that rose above expectations.
“Snap and Twitter have likely run too much on already stretched multiples,” the note read. “As the market, fresh from all-time highs, recovers from a massive correction, we think the premium placed on owning strong businesses increases, while the risk of owning those with zero valuation support becomes even more pronounced.”
Snap has yet to post a profit.
Still, says BTIG’s Rich Greenfield, the selloff at least in relation to Jenner, appears overdone.
“I would say Snapchat is about communicating with our closest friends. Not people you don’t know,” he said. “So the question is, will Kylie Jenner be using it less, or is the average consume using it less.”
Snap shares now hover around its IPO price of $17.