Snapchat is tanking for the first time since its IPO
Snap Inc. is having its first down day in the stock market since going public on Thursday March 2.
Shares of the parent company of Snapchat fell 7% in early trading on Monday to as low as $24.85. They were about 14% lower than the post-initial public offering high.
It's still very early days for the stock, which may test some early investors' patience if it quickly falls below the IPO price of $24 per share, effectively erasing their gains.
Even though there was huge demand for Snap's shares, making it the largest tech IPO since Alibaba in 2014, none of the seven analysts who cover Snap rate it a "Buy." Analysts who advise investors to sell are warning about strong competition from Facebook and Twitter, and slow user growth.
Over the weekend, Barron's magazine said the company's shares could be cut in half.
The broader stock market was also lower on Monday; the tech-heavy Nasdaq was down 0.7%, or 41 points.
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Snap's IPO was much more expensive than those of other tech companies
Snapchat already has a 'sell' rating, and the analyst thinks it will crash 58%
This throwback to Facebook's IPO is one reason some investors are nervous about Snapchat