Snap stock slumps by 12%, wiping out early gains
Shares in Snapchat parent Snap have slumped by 12% on the New York Stock Exchange, wiping out early gains accrued from the launch, when shares hit a high of $27.09.
Unable to hold onto these gains, Snap’s stock is now trading as low as $23.77 as some of the froth accumulated during its hyped opening bubbles off – although this is still some way above the $17 IPO price.
Analysts were taken by surprise at the success of the app, which attained a market capitalization of $35bn – elevating it above American Airlines, Hershey’s and Hilton, despite failing to turn a profit and struggling to maintain growth in user numbers.
Snap’s execs aren’t likely to be too perturbed by the movements thus far, having successfully raised a healthy $3.4bn from the sale amidst speculation they could have generated as much as $4bn such was the enthusiasm of investors.
Snap will be hoping to emulate Facebook, which has powered ahead since launching its own record breaking IPO and not fall into a downward spiral ala Twitter following its failed sale.