ETFs with exposure to Snapchat are reacting to Snapchat’s first quarter story – one in which they missed first-quarter user targets and announced revenue growth would see a substantial slowdown.
Shares of Snap Inc fell 17 percent on Wednesday, a day and Snapchat says a backlash over the app’s redesign is to blame.
Snapchat started its first major redesign in November and followed up with several more updates this year.
But users did not like the redesign. A petition on change.org that urged the company to remove the update got more than 1.2 million signatures. Here was the redesign:
ETFs with Snapchat
Let’s take a look at how ETFs holding Snapchat are reacting to the first quarter earnings reports as of Wednesday, 12 p.m. Eastern time.
- First Trust US Equity Opportunities ETF (FPX) with a 1.24% weighting is down 0.23%.
- PowerShares NASDAQ Internet Portfolio (PNQI) with a 1.21% weighting is down 0.17%
- First Trust Dow Jones Internet Index Fund (FDN) with a 0.99% weighting is down 0.05%.
Some analysts drew a stark comparison with Facebook Inc, which has also redesigned its platform without much backlash.
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Facebook, Instagram, Snapchat
According to Reuters, “Facebook, whose photo-sharing platform Instagram directly rivals Snapchat, last week reported a surprisingly strong 63 percent rise in profit and an increase in users, with no sign that business was hurt by a scandal over the mishandling of personal data.”
Unfortunately, a massive scandal did not hurt Facebook as much as a redesign meant to please users hurt Snapchat and Snapchat users.
Will Snapchat be able to tell a new story?
Will they recover? Not with this design. But hopefully soon.