. Snap Inc
have dropped below its initial public offering price of $17 for the first time,
after jumping 40% over its IPO price on the first day it was listed on the New
York Stock Exchange in March. This signals waning investor confidence in the
social media company’s growth potential as it faces fierce competition. shares
After briefly touching the $17 threshold in mid-June, Snap’s stocks closed the day at $16.99. The company’s stock has been relatively volatile in the Snapchat-maker’s short time as a public company. Its market capitalization after its second day of trading was over $31 billion, according to a report, and today, that figure stands at about $20 billion. This means all the investors who bought into the disappearing-message app company’s much-hyped stock market debut have officially lost money.
On March 2, the shares ended their first day of trading up 44% to $24.48. The stock hit a high of $29.44 on March 3.
The IPO breach came in Snap’s 90
th day on the public market. trading
Analysts said they expect Snap to be volatile in the near term as more than 700 million shares potentially come out of their lock-up period later this month. Analyst reports suggest that the company may struggle to succeed in an advertising market dominated by Google and Facebook.
Most people who bought Snap stock, which opened its first trading day in $24, soaring 41% out of the gate, have lost even more. An Uber driver who invested when shares was up $25 on Snap’s IPO day has lost 32% of his money. It has shed more than 10 billion in stock market value.
Dropping below an IPO price for the first time is a common occurrence. It actually happened to Facebook as it dipped below its IPO price in its second day of trading. It also happened to Twitter, Tesla and Fitbit. Alibaba Group Holding Ltd slipped under its IPO price 233 days after its stock market debut. And by various accounts, half of publicly traded companies sit below their initial price for extended periods.
The Snapchat messaging app is popular among people under 30 who enjoy applying bunny faces and vomiting rainbows onto their pictures. But many on Wall Street have been crucial of Snap’s high valuation and slowing user growth, and the company has warned it may never become profitable.
The 6-year old tech company, Snapchat, reports 166 million daily users of its service, which includes short photo and video messages that automatically delete after viewing, but investors fear that competition from Facebook-owned Instagram is cutting into Snapchat’s popularity.
In May, Facebook Inc’s Instagram introduced face-tracking filters, adding to its existing Snapchat-like camera and messaging features.
In spite of the stiff competition,
is still rolling out new products, such as Snap Map, a way
for Snapchat users to see what their friends, other users, and potentially
brands, are snapping around the world, that aim to boost user engagement. The
company is also still slowly growing, and has yet to monetize most of its users
outside of North America, so it’s too early to call Snap “the next Twitter.” Snap
Meanwhile, Facebook, Twitter and LinkedIn fell an average of 24% in the 30 days ahead of their lockup expirations, according to a report.
Snap shares have fallen 19% in the past 3 months, and about 6% over the past month.
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