On Tuesday, Instagram announced a new update to improve how the app manages direct messages between users on the platform. The new update allowed for text conversations to appear on the same page as disappearing videos and photos. Self-deleting messages, which were a hallmark of the Snap founder’s mobile platforms Snapchat, are now included within Instagram’s new feature update. Also, Instagram will notify a user if someone takes a screenshot of the photo or video; another feature made famous by Snapchat.
According to Instagram, since the company updated their direct messaging function, more than 375 million people are currently using the new feature.
Instagram’s new feature may not have boded well for Snap as shares on Tuesday dropped following the release of the Facebook-owned Instagram feature update. In fact, shares of snap closed down over 1% on Tuesday.
Since Snapchat has gone public, their biggest competitor has been Facebook. A few weeks ago, Facebook revealed their latest feature for Facebook mobile users, Facebook stories. Many have argued that Facebook has been blatantly stealing functions that were popular and celebrated on Snapchat and then placing them on Facebook-owned apps including Instagram, WhatsApp, and Facebook.com. Consequently, many investors have not felt confident in Snapchat as the social media giant Facebook continues to copy Snapchat’s most attractive features. Moreover, Snap inc’s stock is down more than 6% in the past month.
Jahanara Nissar, an investor behind Odeon, says the value of Snap Inc will fall by more than fifty percent to $10 to $12 a share and they plan on shorting the stock. Meanwhile, Barclays has set a price target of $24 per share which is approximately around 9% up from its current position.
Moreover, BTIG analyst argued Snap will need to out-innovate Facebook to compete. Richard Greenfield released a report on Tuesday, and he believes Snap is currently fairly valued, however, because Facebook continues to copy Snapchat, the company will struggle to monetize their platform.