Snapchat finally turning the corner?

Snapchat (SNAP) has been heavily scrutinized since it had its IPO in March 2017, just over a year ago. Since then, its shares have fallen 57% and have seen no signs of coming back up.

However, this week, shares are back up 8%. This sudden spike stems largely from short-seller Andrew Left of Citron Research. Left likes Snap Inc., he reported earlier this week, and he doesn’t plan on shorting it.

And although he does admit that he has profited from shorting it in the past, after its most recent design manicure disaster, he is a long-term supporter of the firm. This support stems from a few reasons. First, Chinese technology giant Tencent recently invested in the firm. With a backing by the fifth most valuable company in the world, Snapchat has a lot more reach, power, and sheer capital.

Additionally, even though Snapchat’s redesign a couple months ago faced significant criticism, even by celebrity Kylie Jenner, millennials are still flocking to the social media platform. Left believes that although their redesign hurt them, it won’t be enough to knock them out of competition with Instagram.

Nonetheless, critics still fear that Snapchat lacks uniqueness. Instagram has copied almost their entire platform, aside from their popular filters that can make users look like a dog or princess. Left acknowledges this, but he doesn’t feel like it’s enough to sell the stock.

He believes that soon enough (within the next year, he claims), if Snap’s stock value doesn’t rise, it will be bought out by another company, such as Google or Apple. Either way, the investor wins by holding the stock.

Snap Inc. may be able to finally turn around its brand name and become a valuable company. If Evan Spiegel can get more of Wall Street on his company’s side, Snapchat will turn over a new leaf.

 

Featured image via Pixabay/TeroVesalainen

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