Snap surges after IPO banks give flurry of 'buy' ratings
By Noel Randewich and Rishika Sadam
(Reuters) - Shares of Snap Inc jumped nearly 5 percent on Monday after several of the Snapchat owner's IPO underwriters handed it badly needed "buy" ratings.
Snap's initial public offering on March 1 was the largest by a technology firm in three years but trading has been volatile, with many investors critical of decelerating user growth. Snap has warned it may never become profitable.
Analysts unrelated to the IPO had in recent weeks mostly assigned neutral or negative ratings to Snap, making it one of the worst-rated stocks on Wall Street.
But on Monday, at least eight banks involved in Snap's IPO gave it positive ratings, including Morgan Stanley and Goldman Sachs. Its stock rose 4.79 percent to end at $23.83.
That left Snap up 37 percent from its $17 initial public offer price, but still down more than $3 from its peak in its second day of trading.
The Los Angeles-based company's app, which allows users to share short-lived messages and pictures, is popular with young people. But it faces intense competition from larger rivals like Facebook Inc.
Like many technology companies popular with consumers, including Facebook and Alibaba, Snap's IPO was a hit with non-professional investors.
TD Ameritrade said Snap accounted for 7 percent of trading volume on its online platform during its first day of trading. As of last Thursday, almost half of its retail customers who bought the stock in the IPO have since sold their shares. Continued...