Snap’s stock price drop reminds brand managers not to pin hopes on IPO

Though the social media app’s parent company had a stellar performance going public, its worth is declining as many worry about its growth potential. Here’s what you can take from it.

After a historic initial public offering, Snap stock has come back down to earth.

Snapchat’s parent company recently saw shares plummet more than 12 percent in its first selloff since it went public last week.

Analysts have been skeptical about Snapchat’s flagging user growth and losses. After the IPO set the stock price at around $17, it shot up over $28. As expectations have tempered, the price hovered just above $23 per share when trading ended Monday.

Snap’s declining stock performance joins another trading disappointment.

GoPro shares recently dipped to an all-time low as Goldman Sachs downgraded the company to a “sell” designation.

After a rough Monday that saw stock prices tumble nearly 8 percent, the company has seen a 40 percent decrease in its stock price over the past six months. It’s especially brutal when you consider that the rest of the S&P 500 has gained more than 8 percent in that time. The company’s stock had been as high as $98 a share, but is currently valued around $8.

It’s a good lesson and reminder for brand managers that stock prices shouldn’t be part of any marketing tactic.

When times are good, it might be tempting to shout it to the masses. For every Google, Amazon and Berkshire Hathaway, though, there’s a story of a Wall Street darling that fell from grace.

For example, Chipotle’s stock price was almost chopped in half after an E. coli scare. It would have been easy for the company to spike the football in its boom times and tout its high stock price, but there tends to be a ying for every yang in business.

If bad press does hit because of a significant dip in stock prices, keep telling your organization’s story in a positive, authentic manner. Control what you can, without appearing tone deaf to the active conversation about your brand.

Above all, remember this: Unless your company is heading for disaster, it’s temporary. Even if it is heading for disaster, that guarantees the bad press will be temporary.

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