Most everyone has heard of Snapchat and its parent, Snap Inc. Profitability is one of Snap’s key concerns since its Initial Public Offering in early March, and a big downgrade Monday from Morgan Stanley sent investors scurrying in Tuesday’s trading on Wall Street.
In heavy trading, “SNAP” was off by 8.8%, to $15.50. That marks a dramatic new low for the tech darling, which was as high as $27.09 on March 3, just after its much-ballyhooed IPO.
It’s not been above $20 a share since June 7.
The Morgan Stanley analysts assigned a new price target of $16 and lowered its SNAP rating to “equal-weight.” Perhaps CNBC commentator and financial analyst Jim Cramer did more damage, noting Tuesday that advertisers do not appear to be generating a high-enough return on investment with the Snap platform.
“The ROI may not be there for advertisers. That’s very damning and it’s what started the long decline of Twitter,” he said.
Elsewhere on Wall Street, radio industry pure-play Saga Communications continued to give back shares and has been below $50 since June 14. At the closing bell, Saga was off 1.4%, to $43.80.
Veritone was off 7.5%, to $10.69, on lower than normal volume, while Beasley Broadcast Group dipped 2%, to $9.65. Urban One, the former Radio One, slid 10.9%, to $2 per share.
The Dow Jones Industrial Average inched ahead 0.62 points, to 21,409.14. The Nasdaq composite was up 16.91, to 6,193.30.
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