Last week, Snapchat’s parent company was the talk of the town. Reports of a High School making millions off of the initial public offering quickly went viral. In addition, NBCUniveral’s investment of $500 million into the company was seen as a vote of confidence. But, Snap Inc. is having their first downward trend on Wall Street since the company went public last Thursday. Shares of the company fell 7% on Monday to a low of $24.85.
The company has not been on Wall Street for a week, which may show if investors are interested in going for the long haul on the company or if the company will quickly drop.
So far, the current price of Snapchat is around $1 per share above the price the company opened after it went public. The IPO was priced at $17 a share.
Even though there was a large demand for Snap’s shares, making it one of the largest tech IPO since Alibaba three years ago, many investors did not suggest buying the camera company. Analysts argue that strong competition from Facebook could hurt the company.
A CNNMoney report suggests that Snap’s IPO may boost the chances of other companies going public including the ride-sharing app Uber and the home-sharing site AirBnB. “If Snap can convince investors to buy its stock despite slowing user growth and a history of operating losses, then maybe Uber, Airbnb, China’s Xiaomi and big data firm Palantir could soon test the public’s appetite for their stocks too,” Paul R. LaMonica said on Monday.
That said, the overall stock market including the tech-heavy Nasdaq was also lower in Monday’s trading.