Back to Press Releases

Snapchat: The Rise & Fall of the Social Media Phenomenon

There once was a social media platform named Picaboo, founded by three Stanford University students in a dorm room back in 2011. Evan Spiegel, Reggie Brown and Bobby Murphy created a realm where users could publish photos & videos that vanished after a few seconds. This social media phenomenon is now known as Snapchat, a $23.43 billion-worth company which revolutionized social media and the way we use it.

Snapchat: The Rise & Fall of the Social Media Phenomenon

Snapchat was the first to introduce the visionary “story” feature, which today is embedded and prevalent in the most popular social media apps, adopted by Facebook, Instagram, WhatsApp, Twitter and even Google. While the platform retains worldwide popularity & exhibits consistent growth, its stock (NYSE: SNAP) has crumbled nearly 70% since the start of the year.

What storm hit Snapchat? Is it risky to invest in the business?


From Zero to Hero

In 2013, Snapchat introduced two new features; Stories and Chat. These tools enabled users to post a series of snaps which remain active for 24 hours. The chat function provided users the function of messaging their friends, aiding Snapchat in climbing the social media ladder. The next year was a busy one, as the ghost-themed business created “Geofilters” and rolled out Snapcash. One feature after another witnessed the rise of Snapchat to 75 million monthly users by 2015, with advertisements generating a significant revenue stream for the company.

Snapchat went public in 2017, closing their first day of trading up 44% at $24.48 a share. From zero to hero, and again to zero, Snapchat’s stock price today is worth a little over $14, marking a sharp drop of nearly 75% in 2022. What happened to the innovative Snapchat?


The Fall of Snapchat

Since the start of 2022, the visionary social media chief witnessed its worst half-year yet. Several factors contributed to the collapse of Snapchat’s market value:


  • Apple’s privacy changes

This factor likely influenced Snapchat’s downfall the most. Apple recently rolled out the App Tracking Transparency (ATT) privacy update on iOS devices, giving users the choice to opt out of allowing apps to track their movement across mobile apps and other websites. This made it difficult to target users with user-oriented ads, which deteriorated Snapchat’s revenue generation as advertisers were clueless regarding who views their ads and how campaigns are performing.


  • Record-high inflation

The rapid & steep rise of prices across the globe has dampened consumer demand for the majority of goods and services. As a response, central banks have hiked interest rates like no tomorrow, hammering stock markets and gearing investors & traders gearing towards safe havens instead of riskier assets.


  • War in Ukraine

Geopolitical instability induced by Russia’s invasion on Ukraine has weighed down on global markets, and the U.S. stock market, home of Snapchat’s stock, is no exception. The conundrums between the two nations have spurred to other countries, with EU & US-led sanctions on Russian resources rocketed energy prices like oil & gas.


Recent Performance

Despite contemporary debacles, it’s safe to say that Snapchat is growing on a fundamental level, which unfortunately isn’t being reflected in its stock price-tag as it does with rival stocks. Yet, in the first quarter of the current fiscal year, the company fell short of Wall Street expectations in key metrics which measure performance:

  • Revenue: $1.06 billion against $1.07 billion forecast

  • Earnings per share: Loss of 2 cents versus earnings of 1 cent predicted

  • Average Revenue per User (ARPU): $3.20 against $3.25 expected


Looking through rose-colored glasses, global daily active users (DAUs) were 332 million versus the 330 million predicted by analysts, marking an 18% year-over-year growth. But it was a predominantly bad quarter for the social media pioneer. Snapchat CEO Evan Spiegel, once a founder, said in a prepared statement that the “first quarter of 2022 proved more challenging than we (Snapchat) had expected”, blaming mounting macroeconomic conditions, escalating inflation, supply chain disruptions, labor shortages and soaring interest rates.


Technical View


Viewing the Snapchat stock (NYSE: SNAP) from a technical lens, the upward-trending ride has come to an end towards late 2021. The near year-long plummet of the stock has been vicious, disintegrating the firm’s value to rock-bottom. Currently priced at $14.28 apiece, the stock is trading by 52-week lows between a support level by $11, and three resistance levels; one lies slightly above $15, another near $21 and a higher one at $40.

The Snapchat stock isn’t looking too attractive at the moment. Regardless, analysts of various renowned financial institutions expect that the stock’s future is bright, with an average consensus analyst estimate of $31.11; a 118% upside from today’s valuation.

Time to Shine

Snapchat is on the road of greater things. The world’s 702nd most valuable company is set to climb up the ranks once again, as it officially introduced its paid monthly subscription plan of $3.99 a month, coined as “Snapchat+”. Launched in nine counties including the United States, France and Saudi Arabia, the paid subscription service unlocks exclusive & pre-release features, such as customizing the app’s icon and pinning a close friend as a BFF (best friend forever).

The move isn’t original, but instead followed suit as other social media giants including Twitter & Telegram also launched premium services intended to attract passionate users. Launching Snapchat+ has the potential of bolstering the company’s revenue. Hand-in-hand with the imminent growth of digital ads in the future, this can open doors for Snapchat once again.

Written by Syam KP, Financial analyst of Gulfbrokers

Trading is risky and your entire investment may be at risk. TC’s available at

Read more

Tencent: Dominating China’s Digital World

Tencent: Dominating China’s Digital World

When exploring the social media spectrum for the first time, you are likely to register on Facebook, joining the 2.9 billion monthly active users of world’s most popular social media platform. Following The Big F in global recognition is video giant YouTube, messaging behemoth WhatsApp and trend-setting Instagram. It’s American social media platforms which dominate the globe, but tagging on to their tails are those of the Chinese.

Meta: Will the Future-oriented Tech Leader Bounce Back?

Meta: Will the Future-oriented Tech Leader Bounce Back?

There once was a website for Harvard University students named Facemash, where users can decide which person is the more attractive out of two based on their pictures. This website expanded to other universities, and defying all the odds, added features over the years including the ability to share content, comment, play games and much more.

Alphabet: The Technology & Social Media Chief

Alphabet: The Technology & Social Media Chief

When you think about social media, Google or Alphabet may not be the first name that pops up. One would most likely envision the popularity of Facebook, Instagram, and maybe Tik Tok. It’s safe to mention that Meta’s Facebook is the world’s most popular social media platform, with over 2.9 billion active users. In second place, Alphabet’s YouTube. Alphabet is comfortably the largest company in the world which owns/operates social media networks, applications or platforms, with a market capitalization of $1.766 trillion.

Major Players in the Market of 4.5 billion Customers

Major Players in the Market of 4.5 billion Customers

According to the Global TOP 5 Social Media Companies, Alphabet is the leading world’s company providing social media. The founder of Google and owner of YouTube is followed by Meta Platforms and Tencent Holdings. Gulf Brokers Ltd. created the list of the largest corporations operating the social media networks according to their market capitalization. In its study (February 2022) Gulf Brokers has been looking into how the networks of TOP 5 are currently doing and, also, who are the competitors have the potential to change the game in the future.