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2020-08-17 10:47

Snap Inc. (NYSE: SNAP) recently expressed interest in bringing Dubshmash under its umbrella. The acquisition of the NY-based video-sharing social media service, as per Snap, will help it compete head-on with the likes of TikTok. Reportedly, the American camera and social media company is willing to spend millions of dollars on the potential merger. Launched in 2013, Dubsmash is a popular platform for creating lip-syncing videos.

At $21.70 per share, Snap is currently more than 30% up year to date in the stock market. In March, when the impact of the Coronavirus pandemic was at its peak, it had dropped to as low as $8.37 per share. In comparison, Snap had performed largely upbeat in the stock market last year with an annual gain of about 190%.

As per experts, the move is attributed to the executive order President Trump signed last week that labelled TikTok as a national security threat and envisions banning it in the United States. Once the app is banned, Snap predicts Dubsmash to take its place in the U.S. The report also said that its bigger rival, Facebook, was interested in a Dubsmash buyout as well.

As per TikTok, its U.S. footprint currently boasts over 100 million monthly users. Downloads for Dubsmash and a range of similar video-sharing apps from Android or iOS app store were seen surging in recent weeks as TikTok user’s brace for a switch to an alternative app.

Snap also launched TikTok-like features on its own platform
According to the sources, however, Snap’s talks with Dubsmash for a potential merger did not last and were not currently active. Meanwhile, Snap has been committed to launching TikTok-like features on its own platform to make it enticing for the rival’s users to switch to Snapchat. In the first week of August, it introduced a music-overlay feature that now enables background music to be added to the videos, much like TikTok.

The Santa Monica-based company took another step last week and upgraded its Lens Studio platform that now allows users to create custom lenses; a term that the company uses to refer to AR experiences. Snap’s custom lenses benefit from full-body tracking.

Snap’s published its second-quarter earnings report in July
Snap’s efforts in expanding its footprint in the video-sharing social media segment follow its second-quarter financial results that it published on July 21st. The company reported its net loss at $335 million in Q2 that was roughly 28% higher than £262 million in the comparable quarter of 2019.

It recorded 238 million daily active users worldwide at the end of its fiscal second quarter with an ARPU (average revenue per user) of $1.98. At £466.50 million, Snap topped experts’ forecast for revenue in Q2. Its per-share loss of 9.25 cents was in line with what the analysts had anticipated. In the third quarter to date in July, Snap expressed confidence that its revenue was 32% up on a year over year basis.

At the time of writing, Snap Inc. has a market cap of $31.87 billion.