Share prices of Snapchat’s parent company Snap continue to fall as the company’s IPO price for the first time since the company made its market debut.
Shares of Snap Inc dropped nearly 5 percent on Thursday to their IPO price, illustrating how Wall Street has lost confidence in the company as it faces fierce competition from Facebook.
Snap, a company that considers its self a camera enterprise instead of a social media company, ohs Snapchat a mobile application that allows users to capture video and pictures that delete after a few seconds. The stock price of Snapchat hit $17, the price set last March.
It is important to note that Snap hit a $29.44 high days after it Wall Street but the value of the company has declined with Thursday’s price being the lowest since the company’s IPO.
Recent studies have show Snapchat is extremely popular and one of the most popular social media applications for teenagers and young millennials. But many investors on Wall Street are apprehensive about how the company can return a profit due to its slow user growth after Instagram launched features similar to Snapchat. In fact, a February Techcrunch report found Snapchat’s growth stalled by 82% following the release of Instagram Stories. Moreover, following the release of Instagram Stories, Snapchat had the lowest growth quarter since the company released their data in 2014.
Even the company highlighted the fact is now facing fierce competition. Snapchat explained in their IPO filing: “We face significant competition in almost every aspect of our business both domestically and internationally,” Snap Inc told. Not to mention, the company pointed out that their competition “mimic our products and therefore harm our user engagement and growth.”
That said, it is important to note that after Facebook made its stock market debut the company’s stock price dropped below its IPO price in its second day of trading. However, since then the company is now up more than 300 percent since its IPO.