Home Daily Blitz Snap Shares Tumble As Short Sellers Move In
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Snap Shares Tumble As Short Sellers Move In

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Traders gather at the post where Snap Inc. is traded on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 6, 2017. REUTERS/Brendan McDermid

The following is an excerpt from Noel Randewich and Lance Tupper | March 7, 2017 | reuters.com |

Snap Inc's shares tumbled 12 percent on Tuesday and traders raced to position themselves to cash in on further declines after analysts gave the company a lukewarm reception following its red-hot market debut.

Snap's $3.4 billion public listing on Thursday was the hottest technology offering in three years, but its lofty valuation and slowing user growth have raised eyebrows on Wall Street and attracted traders who expect its shares to fall.

Opening up the potential for more volatility, the company's underwriters have exercised an over-allotment option to buy an additional 30 million shares, bringing the total IPO to 230 million shares, according to two capital markets sources familiar with the deal.

That means Snap's bankers would no longer be in a position to stabilize its shares by buying them should they fall below their $17 IPO price.

Institutional traders were paying annualized interest rates between 15 percent and 40 percent to be among the first to short-sell the stock, according to S3 Partners, a financial analytics firm.

The owner of messaging app Snapchat is not profitable and has warned it may never be.

For more visit: reuters.com

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