Is Snapchat A Good Buy?

There has been a lot of talk about Snapchat since they went public last month. Snapchat IPO was $24. They peaked at $27.09, and are currently at $22.53 a share. Hours after their IPO Snap was showing serious promise, but after they peaked at $27.09 it was all down hill. It wasn’t until the middle of March that Snapchat made a come back. Many investors are skeptical as to whether or not snap is a good buy, and if they will continue to go up in value. Fortune.com  believes that Snap will soar 20% in the next month. A bold prediction, but not out of the question by any stretch. In the past few months Snapchat has proven themselves to be an innovative company with a lot of potential. The CEO, Even Spiegel states that Snapchat aims to be the next Facebook, NOT the next Twitter.

Personally I don’t think it’s fair to judge snapchat strictly based on their IPO performance. The stock was highly overvalued, and that caught up to Snap fairly quickly. If we look at what Snap is doing today, they show a lot of promise. Yesterday (April 1st) Snapchat released their first major product since their IPO. It’s called “Our Story.” It works a lot like the event stories Snapchat has had like during the Women’s March, but it is available for anyone to share at anytime, and be searched for my anyone at anytime. In a Snap blog post they stated, “We’ve built a new way to understand what’s happening in snaps that are submitted to Our Story, and to create new Stories using advanced machine learning.”

Chicagotribune.com stated that they believe investors think Snap will continue to rise in price is because they continue to roll out new and interesting products. Snap had great success with Spectacles last year. They brought in great numbers as far as new users and revenue. Snapchat has continued to grow in size as far as employees and shows no sign of stopping. That being said, there is still a lot of risk investing in a company that has only recently gone public. To answer the initial question, I think Snap has the potential to be a great investment, but I would use extreme caution. Watch the ticker like a hawk and do your homework.

That’s all for this week! I hope the blog was informative and helpful. As always, if you have any questions or comments to not hesitate to send me a message or drop a comment.

 

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