Snap Inc, the maker of the social media app Snapchat, saw its shares tumble by 1.5% after the company received criticism over the alleged remarks made by its CEO, Evan Spiegel, regarding India and Spain. In a lawsuit filed by the former head of Snapchat's user growth team Anthony Pompliano, he alleges that Snap CEO Evan Spiegel had no intention of expanding to India and Spain as these countries are "poor" and that the Snapchat app is "only for rich people." In response to the alleged statements made by Snapchat's CEO, people took to social media to air their grievances. For example, where users called for uninstalling the Snapchat app in Twitter using the hashtag #boycottsnapchat. Snap Inc., responding to the criticisms raised on social media, has stated that they are grateful to the Snapchat community in India and the rest of the world, and the lawsuit was filed by a disgruntled former employee. It has also previously stated that it considers the lawsuit as a mere publicity stunt.
For the past three weeks, Snap Inc has shed 11% of its share value, with the social network losing 3% of its value just last week. While the criticism of its CEO's alleged remarks has contributed to the fall in share prices, Snapchat's main concern is the intense competition it faced in the recent weeks. An alarming story for Snapchat is the rise of Instagram Stories, a Facebook-backed rival to Snapchat, which now has more than 200 million active users. This active user metric makes Instagram Stories larger than Snapchat itself, which just has 161 million active users. The user growth of Snapchat has also been decelerating lately, with the social network only adding 5 million active users in the fourth quarter of last year.
To make the social network more palatable to advertisers and investors, Snapchat has been taking steps to improve its active users metric. Among them is the improvement of its Android app, which Snapchat blames for poor user growth outside the United States. Snapchat CEO Evan Spiegel has mentioned that the Snapchat app for Android devices will see improvements in the user experience and app performance in the near future. This is important to drive user growth in markets outside of the United States where Android is the operating system of choice.