Snapchat shares rose by 6.5%

PakistanToday

7 years ago

CNBC has reported that Snapchat shares rose by 6.5 percent Monday morning bouncing back from the earlier losses.Shares had fallen 4 percent in previous months after U.S. securities filings showed some funds dissolving their stakes in the social media company.

Shares of the Snapchat parent are likely to face new pressure when employees for the first time are allowed to sell their stock following the company’s blockbuster initial public offering.

The new pressure on Snapchat’s stock was followed by a disappointing quarterly report last week that sent it down 14 percent on Friday to a closing low of $11.83, far below its IPO price of $17. On Monday, the shares fell another 3.8 percent to $11.38 after being among the most actively traded stocks before the market opened.

Wall Street is increasingly worried that Snap is succumbing to competition from Facebook and Instagram.

Instagram, which has adopted features from Snapchat, has 250 million daily active users, compared with Snapchat’s 173 million at the end of the second quarter, fewer than what was expected.

“We remain on the sidelines until we see signs of any boost ,or get closer to the end of the lock-up expiration,” said the Snapchat official.

Starting on Monday, employees are allowed to sell hundreds of millions of their shares for the first time since Snap’s $3.4 billion market debut in March, the largest U.S. IPO in years.

To try to reassure investors, Snap Chief Executive Officer Evan Spiegel and co-founder Robert Murphy on Thursday committed to not sell any of their combined 422 million shares in 2017.