In June, Snapchat claimed 18.6 percent of U.S. iPhone market share, according to mobile insights firm Onavo. This is up from 16.8 percent in May and 11.6 percent in January. The app transmits more than 200 million disappearing messages each day, an astonishingly high volume compared with the photo-sharing numbers of Facebook (NASDAQ:FB) and Instagram at about 40 million.
What this means for Snapchat as a company is unclear. Volume is good and building a strong user base is usually step one in any social media venture. Monetization remains unclear — the company announced in June that it raised $60 million in a Series B investing round (a “scaling” round) led by Institutional Venture Partners. Obvious vectors include native advertisements and selling itself off to a company like Facebook.
Savvy investors are always looking for a rising star, but the app’s potential as an investment candidate isn’t actually why Snapchat is popular on Wall Street.
Wall Street is apparently obsessed with Snapchat, according to New York Magazine, and it’s pretty easy to see why. The self-erasing nature of the messages reduces the likelihood that casual — though perhaps not workplace appropriate — communications become public. Those who work in the financial industry can obtain a degree of security over their not safe for work communications, which is increasingly valuable in a world where people can get fired for their social media footprint.
In an interview with Preet Bharara, a U.S. attorney cracking down hard on insider trading, investing pundit Jim Cramer brought up the app. Specifically, Cramer wondered if Bharara was worried that the self-erasing nature of the messages created the opportunity for bad actors to get away with, well, acting badly.