The optimism for Snap’s stock seems to be fading nearly as quickly as the average message on Snapchat.
Just three days after the company listed on the New York Stock Exchange, Snap’s stock closed below the price it first opened at.
Although Snap priced its initial public offering at $17 per share, the stock opened on March 2, its first day of trading, at $24. Today, it closed at $23.77, down 12% during the trading session. Snap had begun the day at over $28, but a string of analyst notes forecasting a rocky future for the newly public company seem to have deflated the stock after its initial pop on Thursday and Friday of last week. (It’s worth noting that Snap is still trading about 40% above its IPO price.)
Twitter, another social network with a lot of hype and little profitability, endured a similar fate when it went public in November 2013. Its shares dropped below their original opening price on their second day of trading, and didn’t close above again for over a month. Hopefully for its investors, Snap will not follow in Twitter’s footsteps too closely, seeing as it has struggled to grow and sustain profits.
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