Snapchat parent Snap made a killing on the stock market when it first IPOed. First, the company made its public debut beyond the $14-$16 range it had set for itself and opened at $17. Next, the company surged for the next two days to reach a high of $29 on the second day. However, it appears like someone somewhere has flipped the coin and Snap shares continued to tumble for the second day.
Snap stock tumbled to well beneath $22 on Tuesday. At the time of writing this news, shares were trading at $21.66, a drop of over 9 percent.
True, the stock is still a significant slice over its IPO-ing price of $17. However, the people benefiting from that are the ones who were allowed to buy Snap stock right at the IPO. Not everyone was, and humble investors who were picking up 1 or 100 shares were allowed to buy shares later, after institutional investors and high net-work individuals had finished purchasing their hundreds of thousands of stock.
So yeah, large investors are still in profit by over 25 percent, However, judging by the rate at which the stock is failing, that could very well change soon. Meanwhile, Snap currently has a market cap of $30 Billion — half again as much as Snapchat parent’s pre-IPO valuation of $20 Billion.
Things stand on rather shaky ground at present — despite the large amount of investor interest exhibited in the country. Analysts for instance, have mostly given Snap a “sell” or “hold” rating. That doesn’t sit well with investors who had put quite a lot of faith in Snap — even to the point of investing wholesale despite no voting rights being conferred upon the stockholders.
Meanwhile, this is a fair indication that Snap is going to follow its predecessors Facebook and Twitter, in charting a difficult initial period. Where it stands once that particular period is over, is the real question here.
The company is probably hoping to emulate Facebook, which jumped right on track after a rocky initial period and hasn’t looked back since. The last 2 days don’t bode particularly well although that isn’t saying much — we have already seen how fickle stock rates are. We are probably going to have to wait for a week or so before we have enough data to make any solid predictions regarding Snap’s future.
