While Instagram is popping champagne to celebrate Instagram Stories hitting major milestones its first year, Snapchat is headed into crisis mode.
Snap shares have officially hit a record low. Shares were trading at $12.73 as of 11:30 a.m. ET Wednesday, which is 25% lower than the $17 per share attached to the initial public offering price. It’s also more than a devastating 50% drop from its peak price of $27.09 in early March. This stock plummet followed metrics released by Instagram earlier today that showed the app’s growing popularity with users under 25 who are on it an average of 32 minutes a day and users over 25 not far behind with an average use of 24 minutes a day.
If these blows weren’t hitting hard enough, it was also recently revealed that Snapchat did not make the cut for the popular stock market index, the S&P 500 due to its division of stock classes making it ineligible.
“Companies with multiple share class structures tend to have corporate governance structures that treat different shareholder classes unequally with respect to voting rights and other governance issues,” S&P Dow Jones Indices said in a statement explaining the index’s rule change, which revoked Snapchat’s eligibility.
The app was also banned from consideration for the FTSE Russell, a major British index, because the company doesn’t give voting rights to its public investors.
While Snapchat is stuck in the shade, Instagram is currently basking in the limelight. Much to their competitor’s dismay, the app announced that after only one year of implementation Stories has 250 million daily active users. The company also claimed that May analytics revealed 50% of businesses on Instagram create at least one story and that “one in five organic stories from businesses gets a direct message.” Instagram is celebrating the best way they know how, with a new set of stickers that can be used in Stories mode.
Snapchat still has strong numbers, with their Q1 closing out at 166 million average daily users. However with July 31 marking the end of the post-IPO lock up period for certain snap investors to sell their shares and company employees allowed to start selling shares on Aug. 14, there’s no doubt an air of tension around the Snapchat offices. The company’s Q2 earnings will be released next Thursday, Aug. 10, following market close.