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Does Snap Inc (SNAP) Have A Product Problem, And Can Its CEO Solve It?

SNAP – Snap CEO Evan Spiegel needs to be a lot more flexible if he’s going to lead the company back to growth.


Snap Inc (NYSE:SNAP) innovated a host of features over the past several years that all but forced Facebook (FB) to copy them.

The problem is, Facebook did such a good job at mimicking Snapchat that its copies of Snap’s features now enjoy far larger user bases than Snap itself. Now, the disappearing messaging app maker sits at a critical crossroads where it’s considering the unthinkable: a total redesign of its app to make it more friendly for non-teenagers to use.

In doing so, Snap risks alienating its core young user base. But it’s a necessary gamble because of how sluggish Snap’s user growth is right now.

And as Recode reports, CEO Evan Spiegel must change his ways quickly to adopt to investor expectations:

Snapchat suddenly has a product problem. Its core app doesn’t appeal to as many people as Wall Street would like. And because Spiegel pushed Snap to go public so early in its existence, Wall Street isn’t something he can simply ignore.

This is now a personal challenge for Spiegel, who is not just CEO at Snap, but has the final say on almost all decisions, especially product ones. He chose to narrow Snap’s focus, which seemed smart at the time. Now he has the tricky problem of changing his thinking — and Snapchat’s user experience — on the fly to make it more friendly to new users without alienating his old ones.

Whether the redesign will work or not remains to be seen. The beauty of Snap is its lack of overt navigation, and the draw for tech-savvy teenagers is that most adults simply don’t know how to use it.

The future of the company likely hangs in the balance. Stay tuned.

Snap Inc shares rose $0.09 (+0.72%) in premarket trading Thursday. Year-to-date, SNAP has declined -49.10%, versus a 16.36% rise in the benchmark S&P 500 index during the same period.

SNAP currently has a StockNews.com POWR Rating of NR (Not Rated), and is ranked # of 50 stocks in the Internet category.

SNAP at a Glance

SNAP Current POWR Rating™
Overall POWR Rating™
SNAP Current Price $15.93 1.79%
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SNAP Price Reaction

The day of this event (Nov. 16, 2017)
SNAP Closing Price$12.56 0.80%
SNAP Volume15,701,600
41.16% from avg
Leading up to this event
SNAP 1-mo return22.46%
After this event
SNAP 1-day return4.08%
SNAP 3-day return0.97%
SNAP 5-day return3.93%

SNAP Price Chart



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