16 June 2017•Update: 16 June 2017
By Barry Eitel
SAN FRANCISCO
Shares of Snap, the company behind the popular social media app Snapchat, sank on Thursday to their lowest prices since Snap made its market debut.
Snap’s stock closed at $17.00 per share, the same price set during the company’s initial public offering in March.
During trading on Thursday, the stock dropped nearly 5 percent from the previous day close of $17.88 per share.
In the four months since Snap became public, its stock has never bested the price set soon after the IPO.
While there have been some rallies, Snap stock has yet to come close to the $27.09 per share price it had on March 3; the stock’s value has descended more than 30 percent since the company went public on March 2.
The decline is a disappointment for investors since the Snap IPO was heralded as one of the biggest tech market debuts in years.
While analysts could not point to a specific reason for the recent slump, the company last month reported user growth and revenue that were worse than investor expectations.
Since the beginning of May, underwriters in Snap’s IPO including JPMorgan, Deutsche Bank and Barclays have also cut price targets on the company’s stock.
The poor showing currently on Wall Street does not spell doom for Snap, though. Many technology companies have struggled to meet the high expectations of investors soon after an IPO.
Facebook spent most of its first year as a public company with a stock price hovering below its IPO price. On Thursday, roughly five years since it went public, stock closed at $149.90 per share – four times its IPO price of $38.23 per share.
“The view of Snap is just silly,” tweeted analyst Paul Cafiero on Thursday. “[Facebook] shot down to 17.5/share 3 months .”
