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Snap Shares Continues To Plummet

By FSM NewsStock MarketsMar 14, 2017 09:46AM ET
Snap Shares Continues To Plummet
By FSM News   |  Mar 14, 2017 09:46AM ET
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Shares Of Snap Inc (NYSE:SNAP) Declines For The Third Time In A Row After Weak Outlook From Analysts

After Snap Inc officially launched its initial public offering two weeks ago and recorded a 45% rise during the first trading session to as much as $24.48 even after pricing their IPO at $17 from what originally planned at around $14-$18.

Snap shares which were the biggest technology stock launched since Twitter Inc (NYSE:TWTR) and Alibaba (NYSE:BABA) a few years back then drove as much as $29.1 billion in market valuation for the company, as Snap shares hit an intraday high of $26.05 during the initial public offering. The company initially expected around $19-$22 billion in valuation for the first day of the trading of their shares. Although the company showed a bright outlook during their IPO, the shares of the company have received a bearish outlook from analysts out of wariness that a downtrend might follow in the week after the IPO which was seen after the shares of the tech company divided by as much as 10% last week.

Bearish Outlook

Despite the positive outlook the shares of Snap Inc has received during the first week of trading, the excitement on the tech IPO decreased as it was given a price target of as low as $10.

The direction of the company’s shares during the first day until the second day also did not impress investors as it recorded an all-time low of $20.62 while the stock continued to plummet and go down in the next two or three trading sessions.

By the fourth day, SNAP shares are down to $21.44 by 9.80% and have not received any buy recommendation from analysts as the shares traded below $22.

Snap Inc, who warned investors of unprofitability due to their huge spending and investment in expanding the company more than just a mobile application company and transitioning into a hardware developing company.

Snap Shares Plunges Further

Currently, investors are awaiting to whether SNAP shares will decline by as much as $17 per share which is their initial offering price.

In the week that ended last March 10, shares of the social media application company have already fallen by as much as 18.5% closing at around $22. SNAP shares have initially risen by as much as 45% during the first day and around 10.7% on the second day.

Shares of the company are currently down by 4.44% from Monday trading and have been trading down for the past three consecutive sessions.

Some currently believe that the long-awaited IPO might have been overrated considering how big social media companies have been when they're launched their IPOs but has noted that the tech market is growing at a pace that makes a lot of space of Snap’s ambition to go beyond just being a social media company.

Snapchat’s market capitalization is currently standing at $25 billion due to their large number of users in one age group but has considerably slowed down during the last quarter of 2016 where Facebook-owned Instagram launched the stories feature similar to Snapchat’s core feature.

However, when it comes to the long-term growth of the company, Snap is still on its way to fully taking steps in expanding their revenue sources and could still announce more ways to convince its investors that can still give profits and stand out from other giant social media sites.

Snap Shares Continues To Plummet

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Snap Shares Continues To Plummet

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