Snap Inc. (SNAP) - Get Report shares fell 8.3% on Tuesday as an online campaign against changes to its signature messaging app gathers momentum ahead of a key update signaled by the company's founders later this month.
An online petition on the change.org website claims to have collected more than 1.2 million signatures urging Snap to revisit plans to change the look and feel of the Snapchat messaging app, a decision that founder and CEO Evan Spiegel unveiled late last year and defended at the Goldman Sachs Internet & Technology Conference last week in San Francisco, saying "it'll take time for people to adjust." However, the backlash looks to be gaining traction and could threaten the group's recent efforts to expand its daily and monthly active user base.
"There is a general level of annoyance among users and many have decided to use a VPN app, or are using other risky apps or steps, to go back to the old Snapchat as that's how annoying this new update has become," the page reads. "Many 'new features' are useless or defeats the original purposes Snapchat has had for the past years."
Interestingly, SEC filings show that Spiegel sold some $50 million in Snap shares last week, his first such move since the company's IPO last March.
Earlier this month, Snap boasted that its Snapchat re-design had boosted users and revenue, suggesting it could compete with Facebook Inc.'s (FB) - Get Report Instagram, as it posted stronger-than-expected fourth quarter sales of $285.7 billion.
Daily active users on the Snapchat app rose 5.05% to 187 million, the company said, again topping analysts' forecasts compiled by FactSet. Adjusted earnings for the three months ending in December showed a loss of 16 cents a share, Snap said, although revenue per user rose 46% to $1.53.
"Our community has benefited significantly from the changes we have made throughout 2017, and we're excited to see the impact of this hard work reflected in our Daily Active User growth," said CEO Evan Spiegel. "Our work during 2017 is proof that we aren't afraid to make big changes for the long-term success of our business. We redesigned the Snapchat application, transitioned our Snap Ad business to an auction model, and made changes to our team to improve productivity and collaboration."