Snap slides as Wall Street ends lower www.bbc.com
Shares in Snap, the owner of Snapchat, slid 12% on Monday to close below the price at which they started trading just last week in New York.
The stock soared on Thursday after making its Wall Street debut.
Snap closed 44% higher at $24.48, valuing the company at $28bn, after it raised $3.4bn in the richest US technology company listing since Facebook in 2012
Shares in Shap went even higher on Friday.
However, analysts have given mixed views on the future of Snap, debating whether it can emulate the success of Facebook, sending shares down $3.32 to close at $23.77.
It remains unclear whether Snap can expand beyond its core base of young users, or how it will fare in many international markets in a competitive social media environment.
Five of seven financial analysts covering Snap advised investors to "sell" the stock, with none advising them to buy, according to data compiled by Bloomberg.
Needham analyst Laura Martin rated Snap as "underperform" and compared the shares to buying a lottery ticket.
History suggests investors shut out of IPOs are better off waiting instead of rushing to buy them immediately after their debuts.
Globally, shares of most of the 25 largest technology IPOs have languished in their first 12 months after listing, with 16 posting significant falls from their debut day closing price, according to Reuters analysis.
There was more bad news for Snap on Monday after a group representing big US institutional investors asked index providers S&P Dow Jones Indices and MSCI to bar the company - and others that sell investors non-voting shares - from their stock benchmarks.
Both index providers have said they are reviewing Snap's inclusion.
If it was added to indexes such as the S&P 500, managers of stock index portfolios would have to buy Snap shares, and other investors whose performance is tracked against such indexes would likely follow suit.
Wall Street closed lower - the second time in the past three trading days it has done so. Banks gave back some of their recent gains, while mining and chemical companies declined after China cut its economic growth forecast.
The Dow Jones fell 0.2% at 20,954 points. The S&P 500 lost 0.3% to 2,375 points, while the Nasdaq Composite lost 0.4% to 5,849 points.
"We think there's a reasonable chance at the end of the year we'll be a little bit lower than we are right now," said Scott Wren, equity strategist at Wells Fargo Investment Institute.
General Motors lost 0.8% after revealing it will take a charge of $4.5bn, mainly pension expenses, on the sale of Opel and Vauxhall to Peugeot.
Delta Air Lines fell 2.6% after it said profits would be at the low end of hopes.
Published Date:2017-03-07