Snap is sliding on the day it faces its biggest test

The day Snap investors have been waiting for is here, and it has not been great for the company.

Monday marks the first day of trading after the company’s first lockup period expired. 400 million shares owned by early investors are now available to be traded freely.

This is the first such expiration since the company went public in March. An estimated 1.2 billion shares are planned to become available for trading for the first time over the next few weeks.

Shares of Snap are down 1.39% on Monday, and trading at about $US13.62.

One bank thinks the lockup expiration is the perfect time to buy, as the stock price falls due to selling of the previously locked shares.

Shorting the company ahead of its lockup expiration was so popular, the trade became too expensive for some investors. Snap has been on a downward trend ahead of Monday. Shares are down 20.17% since the IPO at $US17 and the stock has been setting new all-time lows for weeks.

Betting on Snap seems to be a bet on the company’s chief, Evan Spiegel. The CEO is one of the few people that can see across the heavily siloed divisions at the company. Spiegel has also been fairly secretive about Snap’s future plans. Betting on Snap requires a “religious” devotion, a person close to the company told Business Insider’s Alex Heath.

Snap has recovered some of its early losses on Monday. Shares were down as much as 3% in premarket trading on Monday. Shares are currently trading at $US13.61.

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