Snap slumps 12 percent, closes at lowest since IPO
By Noel Randewich
SAN FRANCISCO (Reuters) - Shares of Snap Inc (SNAP.N: Quote) slumped 12 percent on Monday and closed at their lowest level of the three sessions since the Snapchat owner's soaring market debut last week.
The $3.4-billion listing last Thursday was the hottest technology offering in three years, but the loss-making company's lofty valuation and slowing user growth have raised eyebrows on Wall Street.
In its market debut last Thursday, Snap surged 44 percent from its $17 IPO price to close at $24.48.
After jumping another 11 percent on Friday, the stock on Monday reversed course and fell 12.25 percent to close at $23.77.
"It's not necessarily because there's something wrong with it. It's because it probably moved way too far, way too fast," said Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York.
Snap is the parent of Snapchat, an app popular with young people for its disappearing messages.
Needham analyst Laura Martin rated Snap "underperform" and compared its stock to buying a lottery ticket.
Of six analysts who have initiated coverage of Snap, four recommend selling, while none have "buy" ratings and two have neutral ratings, according to Thomson Reuters data. Continued...