Shares of Snap are on track for their worst week since November 2017, plunging as much as 8 percent on Thursday after reality TV star Kylie Jenner tweeted which she no longer uses the Snapchat app following its redesign.
Jenner’s tweet comes on the heels of a downgrade coming from Citigroup earlier This specific week. Citi singled out the backlash against Snapchat’s redesign as the main reason they downgraded the stock to a sell rating.
Snap CEO Evan Spiegel had originally announced the redesign in a Nov. 7 earnings letter to investors, when he promised the company was taking steps to make its app more user-friendly. Since its rollout began at the start of the year, Snap has found itself defending the redesign, most recently on Wednesday when which responded to a Change.org petition with the title “Remove the fresh Snapchat Update.”
Despite the growing criticism, Snap shares are still up more than 18 percent This specific year. According to Chantico Global CEO Gina Sanchez, the redesign debacle may get within the way of a recovery by Snap.
“I’ve always been skeptical of Snap because I think which’s very difficult for them to monetize,” she said on the “Trading Nation” segment of “Power Lunch” on Thursday. “Obviously what Kylie Jenner was reacting to was the redesign of the app, which makes which easier or at least makes which possible for Snap to try as well as also monetize the business,” said Sanchez.
Sanchez noted which Jenner’s comment speaks to the demographics of its users, which could put the stock in hot water. “[although] of course the group which uses which, which is actually the 18- to 24-year-olds, they’re going to hate which. They hold the attention span of a gnat,” she added. “I think which’s going to be challenging because they’re going to have to move into an older group as well as also I’m not sure which’s going to work. I think which’s a risk.”
On a more technical basis, Miller Tabak equity strategist Matt Maley says which while which’s too early to tell where Snap is actually headed, he is actually watching one level in particular. According to Maley, the $17 level in Snap used to be “resistance” which the stock broke above, as well as also today the stock is actually retesting which $17 cost. Should which break below what is actually today which $17 “support,” says Maley, Snap could be in trouble.
Maley also believes many of the investors betting against Snap have covered their shorts, which could boost the stock.
“The various other thing to think of is actually which which used to have a lot of short interest, although a lot of which got covered when which rallied 47 percent when which just reported its earnings,” he explained. “So keep an eye on which $17 level. If which breaks below which, which’s going to be a problem.”
Snap shares are down 16 percent This specific week.