Imitation is the sincerest form of flattery — but not always a profitable one, if the imitator is the world’s largest social network, Facebook.
Shares of Snap, the parent of disappearing-message app Snapchat, were down as much as 6 per cent on Tuesday after Facebook announced the launch of a stories feature similar to Snapchat and said it was putting the camera at the heart of its main app.
Snap has had a rocky road since its public-market debut at the start of the month, seeing its share price soar 44 per cent on the first day before falling back to earth in subsequent days. Yesterday, the company’s shares bumped up 5 per cent after receiving a slate of “buy” recommendations from analysts including its lead underwriter Morgan Stanley.
Investors weren’t so enthusiastic about the prospect of Facebook taking square aim at Snap’s turf with Facebook Stories, 24-hour photo collections first introduced by the Snapchat messaging app, which will be available to its 1.9bn users. Other Facebook-owned apps — including Instagram — have already had success with similar formats.
Snap shares fell as much as 6 per cent in Tuesday trading before paring their losses somewhat to trade down 5 per cent by pixel time. Facebook shares tacked on 0.4 per cent.