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Why is Snap Inc Hitting All-Time-Low Prices

Snap Inc., the creators of Snapchat, went public on last year with an initial public offering price of $17 a share.  When the market opened on March 2nd, 2017 shares of SNAP were already trading 41.2% higher than the public offering price at $24 a share.  Since than SNAP has been stuck in a a bearish downtrend that doesn’t look like it has found its bottom yet.

Shares of SNAP have hit an all-time-low price of $9.18 a share today, a year and seven months after their initial listing on the New York Stock Exchange.  The negative price action is most likely because of Snap’s flagship platform Snapchat seeing growth issues in the last few years.  The once proprietary idea has been redesigned and perfected by other large social media giants like Facebook and Instagram who have recently added the Stories feature.

Individually, both Facebook and Instagram Stories are already surpassing Snapchat in terms of average daily users.   As of May 2018, Facebook Stories had 220 million daily active users, Instagram Stories had 300 million daily active users, and Snapchat had only 191 million daily active users.

Recently the company redesigned their entire platform to incorporate more advertisements and create a new feel for users.  Unfortunately, the updated platform was not enjoyed by many users at all.  Even one of the internets largest influences Kylie Jenner Tweeted about her dislike for the new Snapchat claiming she doesn’t “open Snapchat anymore.”

To add to the mix, analyst outlook on Snap isn’t extremely optimistic.  Recently, Citis’ analyst Mark May has lowered their price targets to  $8.  Another analyst from BTIG, Richard Greenfield, has lowered his target to a mere $5.

As shares of SNAP are currently at $9.18 a share, these price targets seem less-and-less ridiculous.

 

 

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