Snap Inc. shares fell approximately 9% during Wednesday trading, following a damning report from an analyst with capital marketing and trading company BTIG.
Richard Greenfield changed his rating of Snapchat’s parent company from “neutral” to “sell”, causing the market dip. He predicts that the stock price could fall to $5 by the end of the year.
Shares were trading as low as $8.90 yesterday, a 57% drop from February when the value peaked at $20.75.
Greenfield adds that users prefer to message friends on Snapchat, rather than viewing the Discover page which has much higher monetisation.
According to MarketWatch, he said: “Unfortunately for Snapchat, messaging monetization is far weaker than stories/Discover content.”
A number of professional publishers, who create content for the Discover pages, told Greenfield that user traffic is half of what it was at the peak.
A number of high ranking executives have been departing from Snapchat, most recently Chief Strategy Officer Imran Khan.
Khan is leaving to start a tech investment firm and had served as CEO Evan Spiegel’s second-in-command.
Spiegel told Bloomberg: “We appreciate all of his hard work and wish him the best.”
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