Snap shares slid below the $US14 level for the first time on Tuesday. They’re currently down 2.13% at $US13.78 after hitting a low of $US13.68.
After a brief pop following the initial public offering, Snap shares have been on a fairly steady downward trend, and are now 19% below their IPO of $US17.
The tech-heavy Nasdaq 100 has risen 10.47% over the same period with many of the largest tech companies contributing to its rise.
Snap has had trouble convincing investors it’s worth investing in over competitors. Snap’s rivals often boast larger user bases, and many have been replicating Snap’s platform innovations which could be limiting its appeal.
Some investors may simply not understand the platform. One analyst thinks his colleagues are too old to really get the use case for Snap, which means they have a hard time pricing the company fairly.
Perhaps the largest worry among investors is the lockup period expiration that comes at the end of the month. Over the next month or so, as many as 1.2 billion shares become available for trading for the first time, according to JPMorgan.
Company insiders will have their first opportunity to sell shares and capitalise on the company’s new public status, and investors are worried that a rash of selling could send the stock down even further.
Snap isn’t standing still, however. With updates to its platform, Snap has brought new revenue channels and made it easier for advertisers to buy ads that reach the platform’s desirable millennial audience.
Barclay’s said these innovations will provide a backing for a period of share price growth after the lockup period woes subside.
Snap is down 43.71% since it opened for trading at $US24 a share.