Snap Inc (SNAP:NYSE) have seen their share price dip as figures for the second quarter reveal that their Snapchat app has lost over 3 million daily active users.
The results come after software updates this year, which have changed the format of the app and driven some users away.
While the company were able to defy analysts with revenues of $262 million for Q2 – up $80 million on-year – they were unable to cancel out the six percent share price dip that followed the announcement of lost users.
Chief executive of Mindshare’s Worldwide Central, Nilufar Fowler, said, ”The drop in Snap’s share price will almost certainly be linked to the decline in DAUs – a loss of 3m daily users since Q1. The loss is relatively small, and it’s certainly too early to say that it signals a trend, we’ll have to wait and see whether the decline is repeated in the next quarter’s results.
“It’s unlikely that any single factor could be blamed for the decline in DAUs – more likely is a combination of factors, including the impact of GDPR in Europe, a potential decline in overall social media usage, the negativity around the infamous redesign, and the plateauing growth of overall social media users.
“It’s likely that some of those lost DAUs will be spending more time on Facebook-owned Instagram, which has introduced Instagram Stories and IGTV to compete directly with Snap Stories.”
On the same day, Saudi Arabian Prince Alwaleed bin Talal snapped up a 2.3% stake in the company for $250 million. Following the news, Snapchat’s share price recovered from Wednesday’s dip, however, it fell 6% again in the first hour of trading this morning.