As Snap Inc. was preparing to take its shares public on Thursday, March 2, another company with a similar name was jumping.
Snap Interactive, the owner of dating and messaging apps including Tinychat and FirstMet, surged 18%. Its so-called over-the-counter shares — traded without a centralised exchange — quickly fell when the parent company of Snapchat started trading.
That was not the first time that Snap Interactive’s shares moved around major news announcements from Snap.
It’s not the first time that shares of one company have surged following news on a similarly named one. Tweeter, the bankrupt electronics retailer, saw its shares pop 685% when Twitter filed for its IPO in 2013.
“I’m not convinced anybody confused anything,” said Jason Katz, the chairman of Snap Interactive’s board. He founded Paltalk, a video-chatting app that Snap Interactive acquired last November.
Katz told Business Insider the company does not usually comment on its stock price. When asked about the timing of the stock’s move and news from Snap, he citied a reverse stock split the company completed on January 5 as one catalyst.
The reverse split, which divided each share by 35, helped raise the price of the stock and was responsible for the initial spike in January shown above. The reverse split was initiated, Katz said, partly to move Snap Interactive a step closer to being able to upgrade from a penny stock to a Nasdaq-listed stock.
“The names are similar — of course, I’m not going to dispute anybody who did come to us,” Katz said. He added that the company had received phone calls from people who thought they were calling Snap.
“Nobody now can be confused because they can buy Snapchat,” Katz said. “They’re buying the symbol SNAP.” Katz’s Snap Interactive trades under the ticker STVI.
Snap Interactive has no immediate plans to change its name. “We’re the ones who have had the name for 10 years,” Katz said.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.