Did Snap just, well, snap?
The high-flying parent company of Snapchat, which debuted last week on the public markets and which rose a heady 44 percent in its first day of trading, backtracked a bit, sliding 12 percent on its third day of trading. The stock ended the day on Monday (March 6) at $23.77, which is below the $24 that marked the opening trade on Thursday.
TechCrunch noted that the latest close still is leagues above the $17 IPO price. However, that relatively profitable trading would have been available only to private investors. Sources cited by TechCrunch mused that investors may have been starting to focus on the fundamentals of the company, which has been losing money even as sales have been growing in the double digits.
The $3.4 billion raised out of the gate, noted TechCrunch, was regarded as a positive harbinger of things to come in the tech world, with open arms greeting unicorns that make the leap from private to publicly traded vehicles. The question, though, is whether such euphoria will last long. TechCrunch stated that in some cases, firms can come to market and raise less capital than may have been doled out privately, or at valuations that would represent a step down from previous fundraising activity.
As far as Snap is concerned, the app has a loyal following. ComScore has said that as many as 70 percent of 18-year-olds to 24-year-olds in the United States use the app, with 158 million users across the globe taking billions of snaps daily.