On 2 March, the company Snap Inc., the developer of the popular service for quick file sharing Snapchat, launched an IPO on the new York stock exchange. The shares were placed at a price of $17 apiece. In the bidding process the cost had risen to $25,98, and the closing of the session was fixed at $24,48. Monday, March 6, quotes Snap and added over 10.6%, rising to $of 27.09.
According to the results of the IPO the Corporation’s market capitalization grew from $20 billion to 24 billion, and to date, to $31.35 billion Thus, the Snap placement was the largest in the technology sector from 2014, when Chinese Internet giant Alibaba has attracted American market for about $25 billion.
The hype surrounding the placing shares Snap due to the fact that market participants have time to miss new big IPOs in the technology sector, says Director of the analytical center of the St. Petersburg stock exchange Pavel Pakhomov. After the release of Alibaba IPO IT company is not spoiled investors in large offerings, the expert adds. For example, one of the most discussed deals in the IT sector in 2016 the share placement online service Trivago on NASDAQ — were able to attract only us $247 million instead of the planned $400 million. “After a long absence of large and successful IPOs such an ambitious offer from Snap attracted the attention of speculators, who continue to “accelerate” the company’s capitalization”, — says Pakhomov.
In this light, the hype around papers Snap Inc. should rather alert the investor than to inspire him to buy them, according to experts interviewed . Head of sales Andrew Khokhrin and investment Advisor Konstantin Naumenko of the company ITinvest note that the multiplier P/S Snap (the ratio of market capitalization to gross revenue), which reflects the investment attractiveness of the Issuer, more than 50 units. This suggests that the value of securities of the Corporation are too high, experts are convinced.
They also remind that by the end of 2016 Snap Inc. recorded a loss of $515 million, so the fundamental reasons for the rapid growth of quotations are not available. These conclusions are supported by analytical assessments of business publication Barron’s, which reports that, based on its own forecast Snap on revenue of $1 billion in 2017, the company’s share price too high at 34 times. In addition, in 2013, when Facebook was in talks with a Snap on the purchase of the startup, it was only about $3 billion, Barron’s said. According to the consensus forecast of analysts surveyed by research company Zacks Investment Research, in the next 12 months the stock price Snap will drop to $14 apiece.
The asset Manager of UK BKS Nikita Emelyanov recommends investors to refrain from buying securities of the Snap. According to experts, currently the fundamentals are not taken into account by investors participating in the rally, and the stock price Snap is solely determined by the excess demand for them. Emelyanov believes that growth will inevitably be followed by collapse, and it will happen in the coming weeks. “Because of the high volatility of the securities in the future will still be good buying opportunities, and shares a Snap you can buy with long — term expectations,” admits financier.
Khokhrin and Naumenko from ITinvest add that the current dynamics of the stock Snap creates good opportunities for play to decrease because of any hype should calm and disappointment. “An example of this — public offering of shares in Facebook, after which the value of securities went down by more than 30%,” — said Khokhrin.
However, pessimism is not shared by all experts. Head of Department of trading operations IK “freedom Finance” Igor Kleshnev believes the lack of traditional first trading days of the drawdown shares a positive indicator. “80% of the shares went to institutional investors, a quarter of them moved to those who are not obliged to sell them in the beginning of the year,” — said the expert. In his opinion, major investors now willing to take risks, and a positive assessment Snap the IPO will support the company’s quoted prices. So until the publication of the first corporate report Snap you can expect a small growth of its shares, followed by a pause. And in the long term annual Snap shares can rise to $30 per paper concludes Clusnet.
What is Snap Inc.
Snap Inc. is the owner of the service Snapchat. Founded in 2011 by Stanford University students Evan Spiegel and Bobby Murphy. Mobile service Snapchat allows you to share photos with short text annotations in real time. After a few seconds after publishing all messages disappear, creating the feeling of a live conversation. In 2015, the company Snap has acquired over $150 million Ukrainian startup Looksery involved in the development of software to change videos in real time. Henceforth the filters with dogs, Snapchat managed to become a real cultural phenomenon. Largely thanks to him that in 2016 the number of active Snapchat users has increased by almost 50%, to 158 million.