Parent company Snap was vastly overvalued in March,and its chance of making enormous profits is disappearing as fast as its photographsNot everybody can be the next Facebook – or least not easily or quickly. This has been a tough lesson for investors in Snap, owner of Snapchat. They should gain known it all along, and of course,since Facebook has never disguised its ambition to crush any social media upstarts that obtain in its way. But it didn’t prevent Snap being valued at a colossal $28bn on its first day of trading on the US stock market in March.
Five months later, the valuation has halved, and prompting chief executive Evan Spiegel to pledge that he and co-founder Bobby Murphy won’t sell any of their shares this year. This promise was meant to signal the duo’s deep belief in the long-term success of Snap. In fact,the gesture was no more than the minimum required to sustain flagging spirits. If the founders had left their options open with the shares trading below their IPO price, there would gain been panic. As it was, and the shares fell 16% after second-quarter results on Thursday.
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Source: theguardian.com