People are Getting Over the Snapchat Update…

One month ago, Snapchat users were shocked with a new app design. The general response to the update was horrible. People were angry and confused.

The update caused many to post their outraged reactions, creating a spiraling negative effect around Snapchat. Many articles on how people were frustrated with the app came out and contributed to the decrease in share price. The worst impact to the company happened when Kylie Jenner tweeted “Sooo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad,”. The day this tweet was published, Snapchat went down big. The tweet took 1 billion dollars off their market cap.

Our View:

We believe the market cap decrease after Kylie Jenner’s Tweet was ridiculous. Although Kylie Jenner has a huge following, her tweet did not stop people from snapchatting.  Also,  after Kyle Jenner made her comment, even she continued to use the app and posts frequently.

The Snapchat update was a huge change and may have scared a few users away. However, we believe the anger towards the update has mostly vanished, and people are used to it. When the update first came out many of our friends were disappointed and turned off by the remodel. As time went on, we saw all of our friends’ disgust for the update slowly fade away. Personally, we have completely adjusted to the new design.

The negative media attention surrounding the Snapchat update didn’t translate to fewer users. Many estimates show that little to no Snapchat users left the platform following the update. The number of daily active users only decreased a fraction of a percent. In conclusion, people don’t like change, but they learn to get used to it. That’s what has and will continue to happen with Snapchat and its remodel.

What Social Media Networks Teens Use The Most – Facebook, Snapchat, Twitter, or Instagram?

Teenagers are always looking at their phone, circulating between social media networks, but do you know which platform teens use the most?

Did you guess Snapchat, Facebook, Instagram, or Twitter?

You probably did. These 4 social media platforms make up 87 percent of teens top preferred networks. However, Snapchat prevails as most popular with almost half of the teens selecting it as their top social media network.

A survey conducted in 2017 shows that 47 percent of teens prefer Snapchat as their top social media network over any other social media networks. Next was Instagram capturing 24 percent of teens. Facebook came in at 9 percent and Twitter 7 percent. 

Our View: In our eyes, the statistics are spot on. Snapchat is absolutely the most common to the teenager life. Streaks, which are created by sending at least one Snapchat back and forth to your friend per day are what keep users coming back day after day. This is why Snapchat has been able to accumulate over 187 million daily active users. Stories, which are 24-hour posts, are an awesome way to keep up to date with what your friends and favorite celebrities are up to. The snap map, which shows where all of your friends are geographically, is an incredibly cool feature that Snap has created, that allows friends to locate each other.  And last but not least, the discover section, which is a place where users can explore news, sports, and anything meaningful going on in the world.

Instagram is incredibly popular for teens. This is where teens usually post their best photos from their best experiences. When people post on Instagram, it is a big deal, compared to posting on Snapchat and twitter which are basically daily updates, posted more casually. 

Our experiences match up with data as we see teens spending the majority of their time on these two networks.

This leaves Facebook and Twitter. Facebook, by the looks of it, has lost all hope with teenage users. We see very few teens still using Facebook as most teens are on Instagram and Snapchat. Only 3 percent of Facebook’s users are teenagers with the majority of their demographic belonging to older generations. For Facebook to increase their number of teen users they will need to make a serious change. However, it is not as bad as it sounds since many of the teenage users they are losing are going to their very own Instagram.

Although Twitter is only 7 percent of teens favorite social media platform, they are still important to the teenage life. We see Twitter as a site that is typically not used every day but more of an impulse site when you need quick updates on a matter or when you want to see what is trending. Although Twitter isn’t the number one site for teens, they definitely provide a unique platform for the uses stated above.

In conclusion, Snapchat and Instagram are running the show, capturing the majority of teens. Twitter is not as essential and appeals to a smaller amount of users. Facebook has really slowed down and has become less and less popular to the ever-changing teenager. Understanding the teenager’s favorite platforms is important because they not only make up a huge part of society but they also provide insight into the future of social media.

Sources:

https://www.statista.com/statistics/187041/us-user-age-distribution-on-facebook/

https://www.statista.com/statistics/250172/social-network-usage-of-us-teens-and-young-adults/

Disclaimer: Do not invest your own money without doing your own research, our content is not meant to convince you to buy or sell a stock, but simply to share ideas and unique viewpoints.

Spotify in the Spotlight – Company Gets Ready to go Public

Spotify, founded in 2006, has just filed for their company to go public. Different from most initial public offerings, the Spotify stock will go straight to the NYSE with no team researching what the initial price offering should be. The risk associated with the stock could be very high since it could take wallstreet time to understand what the company should be trading at. As quoted from the filing, “prior to the opening trade, there will not be a price at which underwriters initially sold ordinary shares to the public as there would be in an underwritten initial public offering. This lack of an initial public offering price could impact the range of buy and sell orders collected by the NYSE from various broker-dealers. Consequently, the public price of our ordinary shares may be more volatile than in an underwritten initial public offering and could, upon listing on the NYSE, decline significantly and rapidly.”

How does Spotify stack up against Competition?

Spotify is up against tough competitors offering similar music services: Pandora, Rhapsody,Soundcloud, and not to mention the new and emerging Apple Music. Impressively, Spotify leads the industry in monthly subscribers with 71 million, the next closest is Apple Music with 36 million.  Although Spotify is much farther ahead, it is important to mention that Spotify was founded in 2006, while Apple Music was founded in mid 2015. Spotify has had a 9 year head start and Apple already has half the amount of subscribers they do.not only does Apple offer a quality service, but they also have the branding and marketing to heavily promote there service At this point in time, Apple’s success and growing popularity is one of the companies biggest threats.

How much money does Spotify make?

According to their F1 they have recorded increasing revenues for the past three years. In 2015 revenue was 2.37 billion, in 2016 3.6 billion, and in 2017 4.99 billion. However, the company has lost money the past three years as well. In 2015 the company recorded a operating loss of 290 million, in 2016 a operating loss of 431 million, and in 2017 a operating loss of 465 million.(All numbers recorded are in USD)

Our View: While Spotify is one of the leaders in the industry, we dont believe that there is anything separating them from the competition. From what we can see, the service that they provide doesn’t blow away the competitors. This is a problem for Spotify because it leaves little room to raise prices because there are endless alternatives for the consumer to go to for a cheaper price. This would opens the door for other music streaming services such as Pandora and Apple music to take some of their market share.

Additionally, with the large user base that Spotify currently has, they are still losing large amounts of money. Although Spotify is the most popular streaming service, in order for them to become profitable they will need to decrease expenses by renegotiating the amount of money they pay to creators or increase the cost of their premium membership. However, Increasing the cost of the membership is a slippery slope as it could turn customers away. Additionally, Spotify has very little leverage negotiating with music creators as they rely on their new content- if the company doesn’t have the latest popular song, the consumer will not hesitate to take themselves to a different platform.

Will Spotify be able to cut down their expenses while maintaining their market share to turn a profit?

Let us know your thoughts in the comments below!

The Future of Chipotle – Can Their Stock Make a Turnaround

Emerging in 1993, Chipotle was one of the first restaurants to serve healthy fast food. Being one of the first in the category of healthy fast food, Chipotle’s customer base grew rapidly, attracting many who had previously been deterred from fast food due to its lack of nutritional value. Opening new locations and growth of sales allowed Chipotle to reach a market cap of 23.41 Billion in late 2015.

For countless years, Chipotle seemed unstoppable in the fast food realm. After years of tremendous growth, Chipotle hit a massive roadblock in 2015 as illnesses such as E. coli and salmonella were reported by some of Chipotle’s customers. With hundreds victim to Chipotle’s sanitary issues, it’s stock took a turn for the worst. Reports regarding Chipotle’s sanitation continued, forcing Chipotle to temporarily close some stores. As their operating income plummeted from 764 million in 2015 to 35 million in 2016. When it finally solved its sanitary issues, the company was not the same. The huge customer base that it had built up was greatly diminished. The sanitary scandals put a bad taste in many of Chipotle’s customer’s mouths. Also, acknowledging the initial success of Chipotle, many other healthy fast food chains began to appear. These competitors capitalized on Chipotle’s sanitary issues by capturing some of their market shares.

Ever since their sanitary issues, Chipotle has struggled to return to its previous brand image and has seen decreases in same-store sales. This has caused the stock to sink from a high of $758 per share in in early August of 2015 to a low of $247 per share on February 9, 2018. Currently Chipotle has a market cap of 9 billion dollars with a P/E of 52. Looking at the P/E,  it is clear that investors still believe that Chipotle will eventually return to its former self and start earning profits like it was. It is on the right track, as it’s revenue went from 3.9 billion in 2016 to 4.47 billion in 2017. Also, Chipotle recently hired a new CEO, Brian Niccol, former Taco Bell CEO. His great track record in the fast food realm has brought new life to the Chipotle stock. Since they released the news on its leadership, its stock has risen from $251.33 to $322.70 per share.

Although news of Chipotle’s new CEO has temporarily boosted its stock, Chipotle is going to need strong earnings reports in the upcoming quarters to justify the continuation of this trend. In order to achieve these sales, Chipotle will need to regain lost customers.  Is it possible for Chipotle to regain these lost customers?  The amount of time it will take for previous Chipotle customers to regain trust in the brand is unknown. Some may never eat there again and some have already returned. Chipotle in our eyes has done everything they need to do to gain customer confidence and make the overall brand trusted again. Because Chipotle has laid the groundwork with 2,400 locations and not a single dollar of debt; they need to and have been putting millions of dollars into food safety. It has invested in its food suppliers to help it grow safer foods along with investing in its restaurants by educating employees.

At the high of Chipotle’s stock, they were one of the only restaurants in the healthy fast food business. Now, in order to reach their previous sales and profitability, Chipotle will have to compete with the numerous other restaurants that have emerged in the same category. This being said, there may also be more demand for healthy fast food than ever before.

Our Point of View:

Chipotle was wildly popular when it first came out, with lines out the door in certain locations. When the news regarding the sanitary issues came out, we saw many people turn away from Chipotle. Despite the decrease in sales, we haven’t seen a decline in the food quality. We always thought that at some point these customers would slowly return as the news blew over. On a smaller scale, from looking at our friends and family we have seen them beginning to venture back into being a Chipotle consumer. Recently, Chipotle released a 0.9% increase in same-store sales, which could just be the beginning.  Maintaining the high-quality food, opening new stores, and spending millions on food safety, is why we believe that Chipotle may be able to both regain and accumulate new customers, returning themselves to their prior sales and brand image.

Disclaimer: Do not invest your own money without doing your own research, our content is not meant to convince you to buy or sell a stock, but simply to share ideas and unique viewpoints.

Could the Most Hated Snapchat Update Actually Boost the Companies Sales?

Although the snapchat update has received a lot of hate, could it still be helping their sales?

Recently, Snapchat is under fire as the response to their update has been anything but positive. With all the negative user reviews, one might  think that Snap would consider retracing its steps and return to its old platform. However, the company has shown no signs of this retraction as Ceo and Founder Evan Spiegel said, “We’re excited about what we’re seeing so far,” and continues stating “The best part is that even some of the complaints we’re seeing reinforce the philosophy [behind the design].” As you can clearly see, he completely disregarded the hate the update has been receiving and the 1.2 million people that have signed the petition to change Snapchat back to its prior form.

It leaves people asking the question, “Why does Snap keep the new update if no one likes it?”

The answer to this question: revenue.

Although Snapchat currently has 187 million daily users, it is and has been losing money for years.

Snapchat’s stock has finally started to rally as it posted record breaking fourth quarter earnings on February 6, 2018, of 285,693 million dollars, however, the company still lost 28 cents per share or 159 million dollars. Despite the hate regarding the new update, the update itself looks like it could continue the uptrend in Snap’s sales.

A lot of people have been outraged with the way Snapchat’s signature story feature is now positioned on the left side of the app which makes it much harder to rewatch stories. Personally, we don’t like it either, but will it make us and our friends stop using the app? No! The reason being is our streaks are way too valuable to throw away because of an update.

The new update now leads the consumer to the right side of the app, where the stories used to be. This whole side of the app is now dedicated to the discover section. This is where Snapchat makes most of their revenue, as there is a lot of sponsored content from companies, and many ads in between the content. Additionally, a slight but important new feature to the app is that when a particular story or headline is over, it doesn’t take you back to to the displayed section of news, instead, it goes right to the next popular story, headline, celebrity sighting, or sporting event, keeping the user engaged, and more importantly presenting them with more ads.

How will Snapchat’s revenue be affected by the new update?

We believe the new Snapchat update was designed as a way to increase ad revenue. While increasing ad revenue, this new update has received an echoing negative response from many Snapchat users. Will this lead to a significant drop in Snapchat’s huge daily user base? If so, will the new revenue model in the update make up for the lost users?

Let us know your thoughts on this bold move from Snap.

Disclaimer: Do not invest your own money without doing your own research, our content is not meant to convince you to buy or sell a stock, but simply to share ideas and unique viewpoints.