Bright yellow, of course!

Snapchat is a global multimedia messaging application well known for their logo, a bright yellow background paired with a ghost. The app is a way to share and experience moments with friends and family. When entering the app it opens right to the camera, so consumers can send a Snapchat within seconds.

Shares of Snapchat’s parent company, Snap Inc., rose more than 6% early Thursday. The stock climb took place on the heels of a rating upgrade from Rich Greenfield. Greenfield, is a media analyst at BTIG Research. Traditionally, Greenfield is a bearish Snap analyst. Thursday he turned bullish, when he raised his rating from “Neutral”  to “Buy”, sending shock through Wall Street.

Initial reactions to Greenfield’s flipped ratings were “why?”

Snapchat has had a rough couple of years since going public, virtually everything has gone wrong. The multimedia company rushed out major updates rather than testing and learning. Resulting in confused and infuriated users, their most valuable asset. So again, why the rating change?

Here are the five reasons Greenfield gave for his upgrade:

  1. Advertising growth in Q4 of 2018
  2. Transitioning from “clickbait” influencer content to premium publisher content
  3. Loyal consumer base – despite missteps, the sub-30 demographic has and will stick around.
  4. Testing a new Android platform, correcting user-experience problems
  5. Improved management morale with new hires and clearer strategic direction.

2018 – not a great year for Snapchat. They were under fire from investors for their inability to grow their user base. The company lost three million daily active users in the most recent quarter.

Due to these disappointing times, Snapchat has been forced to make changes.

Included in these changes are new senior executive hires. For example, Jeremi Gorman was appointed as their Chief Business Officer. Previously Gorman was an advertising executive at Amazon. Additionally, Jared Grusd was named their new Chief Strategy Officer. Previously, Grusd had been leading HuffPost as CEO for the past three years.

Further to the two executive hires, the company also announced a slate of hires in October 2018. This included a Director of EU Policy, Director of Platform Partnerships, Director of Product Design, Vice President of Investor Relations, to name a few.

While 2019 appears bright for Snapchat will it live up to the expectation?