New Features Can’t Save Snap Falling Below IPO Price

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New Features Can’t Save Snap Falling Below IPO Price

By Shoshanna Delventhal | July 10, 2017 — 7:50 PM EDT

Social messaging giant Snap Inc.’s (SNAP) shares were steadily edging toward their initial public offering (IPO) price before falling below the mark on Monday, closing down 1.1% at $16.99 per share. (See also: Snap May Soon Fall Below its IPO Price: Analysts.)

The social media app, popular among Millennials​ around the world, saw one of the most-anticipated IPOs of the past few years, hitting the public market in March at $17 per share and reflecting a market cap of mor than about $20 billion. The 6-year-old company’s IPO marked the largest on a U.S. exchange since that of Chinese internet giant Alibaba Group (BABA) in 2014.

Dip Not Unusual for Young Stocks

While on average, companies that have gone public between 2014 and 2016 have outperformed the S&P 500 in that calendar year, Snap’s investors are now looking at a loss. The dip shouldn’t be too much of a shock considering that 45% of U.S.-listed companies that have gone public in 2017 have slipped below their IPO prices at some point, reports The Wall Street Journal. Facebook Inc. (FB), which has secured a higher than 300% return since its public debut in 2012, fell below its $38 IPO price on its second day of trading and did not surpass that level until about one year later.

SNAP has also proved resistant to the media company’s recent announcements regarding a new feature for advertisers and a few new features for users. The Venice, Calif.-based firm has launched a maps feature that allows users to see where their friends are and drop into popular events that the company pinpoints on the map. The maps features will give Snapchat the opportunity to sell location-based advertising. Users can now also add links to their picture and video messages and select objects in a photo to remove or highlight against pre-programmed backgrounds. (See also: Is Snapchat Sabotaging Its New Revenue Model?)

Published at Mon, 10 Jul 2017 23:50:00 +0000

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