Snap shares close at a new record low

 
Courtney Goldsmith
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US-FINANCE-NYSE-SNAP INC.
Shares in Snap have fallen well below its IPO price (Source: Getty)

Snap's bad week just keeps getting worse.

Shares in the owner of messaging app Snapchat tumbled to close at a fresh record low today, down 3.44 per cent at $12.65.

On Monday, early investors and employees were allowed to sell their holdings totaling 400m shares for the first time since the tech company went public in March with a $3.4bn initial public offering (IPO).

The firm's stock has slipped around nine per cent this week, well below its $17 IPO price, which was the third-largest for a US tech company.

While early investors including Lightspeed Venture Partners got the green light to sell shares from Monday, employees owning another 782m will be allowed to start selling on 14 August, according to JP Morgan analyst Doug Anmuth.

That will be just four days after Snap reports its quarterly earnings.

Investors have started voicing concerns about user growth and expressing a loss of confidence in the company's ability to eventually turn a profit like its other tech rivals.

Nearly 49,000 Snap shares were traded on Monday, more than double the average daily volume during the previous week and the most since mid-May, according to Reuters.

Snap was also blocked from the S&P 500 yesterday when the US index followed in the footsteps of the FTSE Russell because of Snap's lack of voting rights for shareholders.

S&P Dow Jones Indices said companies with such shareholdings will not be eligible for the S&P Composite 1500 and its component indices such as the S&P 500 from now on.

FTSE Russell made similar changes last week that blocked Snap from its indices.

The changes come after Snap decided to offer no voting rights to shareholders during its float earlier this year, which caused concern among investors.

Read more: Oh! Snap won't be in the S&P 500 either

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