It is just a 6% increase but for investors of Snap Inc (NYSE: SNAP), this is a big deal indeed. After all, the company's stock has closed higher for the very first time since March when the brand went public. Snap is the brand behind SnapChat, a well known mobile app.
Finally, the tide turns for Snap
The brand's management is sure to be ecstatic after the stock value spiked, mainly because the poor performance has been a much -talked about issue about this company. It has been about half a year since the public issue and the lack of momentum in stock values has not been good news for the brand at all. The stock did touch a high of $30 right after public issue day but since then, the going has been imminently forgettable.
The reason behind the stock rise
The improvement in Snap stock prices can be attributed to a couple of reasons that have worked unexpectedly to shore up the values. Some bullish analyst strategies have yielded better results than expected. In addition, the Snapchat Discover Video feature that the brand has also contributed quite significantly to the stock price increase. Price have dipped since then but the spike has been an indicator of the brand's potential.
Stock not expected to go great lengths
While the stock has moved up a bit, experts are not hopeful about it showing any great increases in the coming months. In fact, Wall Street analysts believe that the stock will be under pressure thanks to many factors. These factors include falling growth trends and Snap's failure to consistently give profits, both of which will bring pressure to bear. There is also the general feeling that Snap may lose out in the advertising front. Competition is very intense the company's niche and robust advertising is a must to keep the edge. Snap has not demonstrated its abilities in this arena yet and there is no reason to believe that it will excel here. This could become a reason for the company to fail to hold market interest.
There is not much to indicate that Snap will be able to retain its momentum and post a rise in stock prices in September, this far. However, the company did exceed expectations in August and hopefully, it will be able to repeat the magic this month as well. At least, this is what the investors and the management will be hoping for.