Oh Snap! Shares Slip In First Week Of Trading
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NEW YORK (CBSMiami/AP) — Those who waited to snap up shares of Snapchat are being rewarded.
Those buying on Tuesday actually paid less than what the shares were going for on the first day of trading last week.
After tumbling 12 percent Monday, shares of Snap Inc. fell another 8 percent in early trading Tuesday, to $21.91.
Snap priced its initial public offering of 200 million shares at $17 each. Shares opened at $24 apiece Thursday and jumped 44 percent on its first trading day.
Industry analysts grew leery of slowing user growth numbers last year and everyone is now trying to figure out the value of a young company that is quickly catching up to Twitter in the number of people who use it.
The IPO of the Los Angeles company was the most anticipated arrival since Twitter Inc. entered the public market in 2013.
In a recent filing with the Securities and Exchange Commission, Snap said that it had 158 million daily users in its fourth quarter, up 48 percent from the prior-year period. But Wall Street has become skittish about future growth.
Whereas user growth expanded in each consecutive quarter of 2015, that expansion began to slip in each consecutive quarter of 2016, hitting just 5 million new users in the final quarter of the year.
That was half the user growth in the final quarter of 2015.
Snap blamed the slowing growth late in the year on technical issues, saying the launch of several products and release of multiple updates hurt the performance of its Snapchat app.
It's been a mixed bag for social media. Where Facebook has soared, Twitter has struggled to find its way.
Mark Zuckerberg's company debuted on Wall Street in 2012. It has continued to enhance its social network and its ad revenue and user base has grown fast. Twitter, since its 2013 IPO, has experienced stalling revenue growth and the company, after the return of co-founder Jack Dorsey, has been forced to cut costs and shuffle leadership.
Twitter is now valued at $11 billion, while Facebook is valued at $395 billion.
Snap, upon its IPO, became more valuable the stalwarts like American Airlines, Macy's and Xerox.
(© Copyright 2017 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)