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Snapchat Parent SNAP Dips below IPO Price

Snapchat Parent SNAP Dips below IPO Price
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Snap is being sued by shareholders who claim the company provided misleading Snapchat usage statistics in the run-up to the IPO. The company, however, denies such claims.

Amidst this legal complication, share prices of the Los Angeles based company, Snap Inc., the parent company for Snapchat, witnessed a major price dip. The share prices on Monday traded as low as $16.95 before closing at $16.99, down about 1.1% from its IPO price. The company went public in March at the share price of $17.

Falling below an IPO price for the first time is a phase most companies go through. Facebook, Twitter, Tesla and Fitbit also saw their stocks dip below their IPO offerings for long periods of time. This is a signal to investors, pointing to waning confidence in the Snapchat app-maker’s ability to deliver on promises of increased usage and ad sales in the coming years.

Snap’s share prices are speculated to fall further below its IPO. While many of Snapchat’s IPO backers are currently prohibited from selling the stock during what’s known as a lock-up period, the expiration of those restrictions ends on July 29. If the trend continues, we could expect many investors to sell out their stakes in the company.

Here is a graph of Snap’s market performance over the last few months:

Megha Shah for TechFunnel.com


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Megha Shah
Megha Shah
A dreamer, traveler, aspiring entrepreneur and a bookworm beyond repair, Megha Shah is extremely fond of writing and has been doing so since she was a child. Apart from being a part-time writer, Megha is currently in college, pursuing B. Com. (Hons). Megha is an ardent follower of ‘Hardship, Hustle and Heart’ and firmly believes in the power of hard work and destiny!

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