Snap shares hit new low in choppy trading as valuation concerns mount | Reuters
Shares in Snap Inc hit a fresh low on Wednesday, falling as much as 2.6 percent before clawing back some losses in choppy trading as analysts questioned the company's prospects. In its tenth day of trading after its $3.4 billion public listing, the owner of the Snapchat messaging app was last down 0.9 percent at $20.40 after hitting a low of $20.05 in the first few minutes of trade
Shares in Snap Inc hit a fresh low on Wednesday, falling as much as 2.6 percent before clawing back some losses in choppy trading as analysts questioned the company's prospects. In its tenth day of trading after its $3.4 billion public listing, the owner of the Snapchat messaging app was last down 0.9 percent at $20.40 after hitting a low of $20.05 in the first few minutes of trade.
Snap has raised some eyebrows on Wall Street, with analysts flagging the company's slowing user growth, widening losses and lack of voting rights for outside investors. Cantor Fitzgerald kicked off its coverage of Snap with an underweight rating and a price target of $18, just a dollar above its initial public offering pricing.
Trading in Snap's newly launched options has largely leaned towards defensive bets, but the sharp declines after a flashy market debut have started to draw some bets on shares stemming their losses in the near term. [nL2N1GR1BG]
Snap's current valuation is "rich under most scenarios" for an unproven model that marketers see as experimental, Youssef Squali, analyst at Cantor Fitzgerald, said in a research note. Squali also cited an untested management team and an intense competitive landscape.Snap shares priced at $17 and opened at $24 in their March 2 public debut. The stock hit an intraday high of $29.44 on March 3. If the stock closes down on Wednesday it would mark Snap's fifth straight session of declines. (Reporting By Sinead Carew and Saqib Ahmed; Editing by Meredith Mazzilli)
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