Snap 1 Month After IPO: Vanishing Messages, Disappearing Gains

Camera-based social network’s stock remains below its first day price despite some recent good news

Snapchat parent Snap Inc. went public on March 2 with plenty of fanfare — and a 44 percent initial pop. But one month in, the camera-focused social network’s story hasn’t been nearly as fun for investors.

On March 1, Snap set its offering price at $17 a share and opened for trading the next day at $24 with a strong surge that carried through to the end of the week, with the stock briefly climbing as high as $29.44 a share on March 3. But that would prove to be its high-water mark so far, as a barrage of sell ratings from analysts and quickly deflating enthusiasm on Wall Street helped Snap’s stock slide all the way to $18.90 at one point.

And even as the company started to pick up a little more love from analysts, getting buy ratings from Goldman Sachs, Citigroup, Jefferies and Deutsche Bank last week, Snap hasn’t been able to break out of its funk. Monday, on its one month anniversary, the company behind the biggest tech IPO since Alibaba saw its shares close at $22.35, as Snap’s stock ended the day down 9 percent from its first close price — making it a March to forget.

However, the history of tech IPOs should caution people from reading too much into one month, as some of today’s stalwart tech stocks suffered through similar growing pains.

Facebook barely closed above its $38 IPO price when it went public in May 2012 and proceeded to decline during nine of the next 13 trading days following its IPO and finished its first month down nearly 14 percent from its first close. The lull continued that summer, and Facebook eventually bottomed out at $17.55 a share on Sept. 4, 2012. Investors who stuck with CEO Mark Zuckerberg and his social network were rewarded, though, as its stock started to take off soon after and has continued to roll, closing at $142.28 a share Monday.

Twitter also had a rough month, but that might have been more indicative of its future path. After a 73 percent pop on its first trading day of Nov. 7, 2013, Twitter had a rollercoaster first year before falling into steady decline. Its stock dipped below their $26 IPO price on Aug. 20, 2015 and have continued to slide, finishing Monday at $14.84 a share.

Like Twitter, Snap is yet to turn a profit, but its IPO has been a catalyst for plenty of young people new to stock trading to invest in the market. After one month, plenty of them are learning a hard lesson. But that doesn’t mean a little patience can’t pay off in spades — just ask people who bought into Facebook early.