Snap shares down five months after listing

Dhaka,  Thu,  21 September 2017
Published : 12 Jul 2017, 15:09:08

Snap shares down five months after listing

Snap shares down five months after listing
The investment bank that led Snap’s $3.4 billion public offering has downgraded the stock less than five months after the listing, admitting it had been wrong about the messaging app’s ability to generate advertising revenues, reports a global media Wednesday.

The move by Morgan Stanley, in a note from analyst Brian Nowak, sent shares in the Snapchat owner down nearly 8 per cent to $15.64 in afternoon trade, well below its $17 offer price. Morgan Stanley cut its target from $28 to $16.

Mr Nowak said Snap’s ad products were not evolving as quickly as expected and it faced increased competition from Facebook-owned Instagram, which has copied one of its core features, a day-long photo collection called Stories.

Snap shares surged as high as $29.44 in the day after its public debut, which was one of the most anticipated tech offerings of the year. But the stock has had a rocky ride since the March IPO, with several analysts questioning its high valuation and warning of fierce competition. Even before the Morgan Stanley downgrade, it had closed below its offering price on Monday, at $16.99.

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