Snap Shares Experience First Slide on Analysts’ Downgrade

Following a strong market debut, Snap Inc. fell for the first time and edged down below the opening price of $24 during its first day of public trading after analysts started expressing their stance regarding the firm's true valuation.

The Snapchat-parent prices shares in its IPO which was warmly received by the market, surging by 44% on their first day of trading due to the strong demand. Its dramatic rally continued on Friday, rising further by 11%.

However, by Monday, majority of the seven analysts who are assigned to Snap had a sell recommendation on the stock, while two adviced to hold. Data showed no analyst stamped the stock with a 'buy' rating.

An analyst at Needham & Co. said the shares were overpriced during its IPO and estimated the firm will see a declining trend in earnings and valuation adjustments in the first two years of its public trading, stating that Snap's value was actually at $19 to $23 per share. A Morningstar Inc. analyst said that the company's monetization capabilities are not as strong as its valuation implies, and priced it at $15.

Snap sank 12 percent to trade at $23.77 at the close of New York trading, bringing down its value to around 28 billion.

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