That is why I believe Snapchat’s ad featuring Rihanna and Chris Brown was not an accident; it was likely strategic. I believe Snapchat understands how incendiary and controversial content can spark engagement. Secondly, the public cannot get enough of celebrities and the Internet and social media have given us a closer glimpse into their lives. Certain sites and influencers have practically made a living writing about Chris and Rihanna and other celebrities. When I first heard the story about the Snapchat ad I suspected the company was in trouble and needed to take risks to amplify user engagement.

After examining its financial results I am practically certain of it. The company cannot cover its operating expenses and needs to take risks. The blow back from purposely posting incendiary content is that the site could become too toxic and push users and potential users away. That appears to be have been the case with Rihanna. I also would not be surprised if Twitter (TWTR) or Facebook (FB) are not also attempting to create their own video sharing platforms to compete with Snapchat. A real threat from another social media giant could cut into Snapchat’s ad revenue and amplify its cash burn.

Conclusion

The Rihanna tete-a-tete likely implies Snapchat is having trouble financially and needs to amplify user engagement. I do not think PR debacle will crush Snapchat, but consistent operating losses and cash burn could. Sell SNAP.

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