Snap shares sink as IPO euphoria vanishes
SAN FRANCISCO - Shares of Snapchat parent company Snap sank on Monday as euphoria that marked its public debut on Wall Street last week vanished like the service's ephemeral messages.
Snap shares were down 2.26 percent to $23.77 at the close of formal trading on the New York Stock Exchange.
Snap shares rocketed Thursday after making their debut on Wall Street, with investors keen to get their hands on shares.
Snap jumped 44 percent to close at $24.48 in its inaugural trading day, after raising $3.4 billion in the richest US tech company listing since Facebook in 2012.
The Southern California startup known for its disappearing photo messages had priced its offering at $17 to give it a market value of $24 billion.
The strong debut lifted its value to $28 billion, or more than double that of social media rival Twitter, which went public in 2013.
Snap shares climbed even higher on Friday.
Analysts have offered mixed views on the future of Snap, debating whether it can mimic the success of Facebook or end up in the tech junkyard.
On Monday, five of seven financial analysts covering Snap advised investors to "sell" the stock, and none were advising buying shares, according to data compiled by Bloomberg.
Snapchat, which became a hit with teenagers and young adults due to messages that vanish after being viewed, reported that 161 million people used the service daily in December.
The company also claimed growing revenue, but has yet to report a profit.
Snap makes money from digital advertising, where it faces competition from internet giants Google and Facebook.
Some analysts are skeptical about Snap point to the example of Twitter, which has seen only modest increases in its user base since its 2013 IPO, and now trades well below its offering price.
It remains unclear if Snap can expand beyond its core base of young users or how it will fare in many international markets in a competitive social media landscape.