Snapchat had its IPO last week and had a great first day.
The IPO price was $17. It opened up for trading at $24. It climbed as high as $29 last week.
But it went down 10% each day the first two trading days this week.
Right now it’s trading at $21.
On its first day of trading, someone gave it $10 price target!
Some great companies saw a 50% haircut in their stock price shortly after their IPO.
For example, Facebook (FB) and Baidu (BIDU) saw their share price go down more than 50% from their opening day stock price.
But they both have recovered from their lows to post significant gains in their stock price in the years since their IPO.
Then you have other companies whose stock price are high-fliers at first, only to come crashing down to Earth in the following months.
For example, Fitbit (FIT) was trading at $51 shortly after their IPO. It’s now trading for less than $6.
Another example is that GoPro (GRPO) was at almost $85 at its peak (shortly after its IPO) and now it’s trading for less than $8.
When Snapchat was filing for its IPO, it said that it wants to be known as a camera company and not as a social media company.
So if you ask us what the future holds for the stock price for Snapchat? Will it be as successful as Facebook and Baidu? Or will their stock be an epic fail like Fitbit and GoPro?
Well, the “picture” is a little “blurry” and their future is not really “in focus”
if it “develops” new revenue streams, then we think their stock price will turn out “picture perfect”
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