Snap to it
Will the social media darling Snap wind up more like the high-flying Facebook or the troubled Twitter?
Investors are wondering as Snap prepares for its initial public offering of stock next month. Signs point both ways.
Snap is the owner of
Snapchat, a photo- and video-messaging app best known for images that disappear automatically after viewing.
Like Twitter, Snap has never made a profit, while Facebook earned $1 billion the year before it went public. On the other hand, Snapchat is more like Facebook in that its users are highly engaged, many checking in daily.
That said, Snapchat’s growth in daily users has slowed down considerably in recent months, causing some concern that the company’s decline may have already begun. The slowdown came as Facebook’s Instagram introduced “stories,” a clone of a Snapchat feature that lets users post a loop of photos and videos that disappear after 24 hours.
Chi-Hua Chien, managing partner at Goodwater Capital, says reigniting growth will be Snap’s biggest challenge.
Snap managed to reverse an early 2015 slowdown after introducing the stories feature. Can the company do it again?