Thanks to Kylie Jenner and those pesky millennials, Snapchat is staring down the barrel as its stock continues to drop at an alarming rate.
A new report from a Wall Street analyst warned that the company is “quickly running out of money,” as CNBC reports. Shares in Snapchat’s parent company Snap Inc. dropped five percent today and linger at the $7 level, it’s lowest point in the past year. In layman's terms, Snapchat is broke.
"While it is obvious that Snap wasn't prepared for life as a public company, it now has a more pressing problem. It is quickly running out of money," media and tech analyst Michael Nathanson of MoffettNathanson wrote Tuesday. He says the company needs a “miracle” solution ASAP, or it could be washed up by 2020.
This downward spiral is not only the result of Snapchat’s hugely unpopular/poor redesign. Nathanson was brutal in his comments, saying Snap CEO Evan Spiegel’s recent memo suggests the company is “attempting to do the impossible,” while “Facebook is ramping [Instagram] Stories usage and monetization across its massive installed base.”
Nathanson considers the company's money problems “self-inflicted damage."
"Although Twitter pulled off a similar miracle, call us skeptical as – despite the memo – we don't have faith in Snap's leadership to navigate these rapids," Nathanson concluded.
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