BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

The Rihanna Effect: Snapchat CEO Evan Spiegel's Net Worth Drops Nearly $150 Million In Two Days

This article is more than 6 years old.

First came the Oprah Effect — when Winfrey endorses a product and it shoots to new heights of popularity. But what about the Rihanna Effect?

On Thursday morning, the singer dissed Snapchat and told users to delete the app, causing shares of Snap, the app’s parent company, to tumble as much as 5% Thursday. It fell another 2% Friday, before rebounding slightly for a total two-day loss of 4.7%.  In turn, the net worth of Evan Spiegel, Snap’s cofounder and CEO, fell nearly $150 million over two days. He is now worth an estimated $3.8 billion, according to FORBES’ real-time rankings of the planet’s wealthiest people

Rihanna’s criticism followed the release of an ad on the Snapchat app that asked users if they’d rather slap Rihanna or punch Chris Brown, Rihanna’s ex-boyfriend, who pleaded guilty to assault after violently attacking her in 2009. Snap removed the ad and released a statement on Monday saying that the advertisement was mistakenly approved and that it had violated its advertising guidelines.

Courtesy of Instagram

But Rihanna, for her part, was unsatisfied with the company’s apology. She took to Instagram Thursday morning, posting a lengthy take-down of both the ad and the app. “Now SNAPCHAT I know you already know you ain’t my fav app out there!” she wrote. “I’d love to call it ignorance, but I know you ain’t that dumb! You spent money to animate something that would intentionally bring shame to [domestic violence] victims and made a joke of it!!!!”

This is not the first time that Snap — whose market value has dropped 25%, to $20.82 billion, since its IPO in March 2017 — has had its stock plummet after celebrity criticism. Last month, Kylie Jenner tweeted that she no longer used the app following a redesign, causing Snap's share price to fall more than 6% and the company to lose $1.3 billion in market value.

Any fluctuation in Snap’s share price has an immediate impact on Spiegel’s net worth, as he owns 18% of the company.

Spiegel founded Snapchat with his Stanford University fraternity brother Bobby Murphy in 2011, when Murphy was coding full-time for software firm Revel Systems and Spiegel was still in college. (A third cofounder, Reggie Brown, was reportedly forced out later in 2011. He filed a lawsuit seeking “over a billion dollars,” but settled for $157.5 million in 2014.)

Soon after launch, the app exploded — particularly among millenials. It now boasts 187 million daily active users. Still, competition from the likes of Instagram has caused growth to slow. The latest turbulence involving Rihanna sure looks like a self-inflicted wound at a time when the company can hardly afford it.

Send me a secure tip