Snapchat slides after Instagrams' clone says it has more users

Evan SpiegelGetty/Michael KovacSnapchat CEO Evan Spiegel speaks onstage during ‘Disrupting Information and Communication’ at the Vanity Fair New Establishment Summit at Yerba Buena Center for the Arts on October 8, 2014 in San Francisco, California.

Shares of Snap, the parent company of Snapchat, are down 0.7% at $US20.08, after Instagram announced its Snapchat-like Stories app has more daily users.

The Facebook-owned Instagram Stories announced on Thursday that it has more than 200 million daily users, ahead of the 161 million reported by Snapchat.

Things haven’t gone so well for tech’s darling IPO of 2017. Snap had a blistering March 2 debut, which saw its first trade occur at $US24 after pricing at $US17. The stock hit an all-time high of $US27.09 on March 3, but has been in a tailspin ever since.

Snap received several “sell” ratings early on as analysts questioned its ability to deal with competition from bigger companies.

“Investors in Snap will be exposed to an upstart facing aggressive competition from much larger companies, with a core user base that is not growing by much and which is only relatively elusive,” wrote Brian Wieser, an analyst at Pivotal Research Group, as he placed a $US10 target on the stock the day Snap went public.

After putting in its high the day after IPOing, Snap tumbled nearly 30% in the following weeks before receiving a deluge of bullish ratings from its underwriters.

Here’s a rundown of those calls:

  • Goldman Sachs: Buy, $US27 price target
  • Morgan Stanley: Overweight, $US28 price target
  • Citi: Buy, $US27 price target
  • RBC: Outperform, $US31 price target
  • Jefferies: Buy, $US30 price target
  • Oppenheimer: Market perform
  • Credit Suisse: Outperform, $US30 price target
  • UBS: Neutral, $US24 price target
  • Stifel: Hold, $US24 price target
  • Cowen: Outperform, $US26 price target

Snap was able to ride the momentum of those ratings, putting in a high of $US24.40 a share on March 27. Since then, however, the stock has pressed back towards the post-IPO low of $US18.90 as the company has had to deal with companies like Facebook cloning some of its ideas.

On Wednesday, Snap announced its first-ever quarterly conference call will take place on May 10. It is unclear if CEO Evan Spiegel will participate.

Get the latest Snap stock price here.

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