Snap announced the launch of a new feature called Spotlight within the Snapchat app for users to share short videos publicly. Shares of the social media platform advanced 1.6% in pre-market trading on Tuesday.
Snap (SNAP) said that snapchatters can win more than $1 million every day if their video tops the Spotlight platform. Currently, the feature will be made available in the US, Canada, Australia, New Zealand, the UK, Ireland, Norway, Sweden, Denmark, Germany, and France.
Snap said “With over 4 billion Snaps created each day, Spotlight empowers the Snapchat community to express themselves and reach a large audience in a new way.” In addition, “As a way to celebrate and reward the creativity of the Snapchat community, Snap will distribute over $1 million every day to Snapchatters who create the top Snaps on Spotlight, at least through the end of the year,” the company said. (See SNAP stock analysis on TipRanks)
Following the Spotlight launch, Stifel Nicolaus analyst John Egbert said “we view it as a thoughtful adaptation of a TikTok-style destination for content that could reenergize public content creation on Snapchat and create valuable incremental ad opportunities.” Egbert reiterated a Buy rating and a price target of $40 (11.6% downside potential) on the stock.
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 23 Buys, 7 Holds and 1 Sell. The average price target stands at $41.18 and implies downside potential of about 9% to current levels. Shares are up by 177.2% year-to-date.