Snap shares swung wildly in early trading on Monday as the end of a lock-up on shares held by company employees caused a spate of activity around the tech firm’s stock.
The share price rose as high as $13.15 after briefly falling below $11.30 at the opening bell in New York trading, before slipping back to around $12.60 at the time of writing.
Some 782m shares from directors, employees and insiders were released from their lock-up today, according to S3 Capital Partners.
The Los Angeles-based technology company has struggled since it floated on the New York Stock Exchange in March. Shares changed hands for as much as $29 after the initial public offering, but have since declined steadily.
At the end of last week Snap’s shares fell by 14 per cent as investors balked at bigger than expected losses and slower user growth than expected for the company’s photo messaging app, Snapchat.
The app has faced increasing scrutiny over its rivalry with social media giant Facebook, which tried to buy Snapchat in 2013. Since then its Instagram app has released features similar to some of those offered by Snapchat, raising questions for investors around how unique the firm’s technology is.
Stock came under further pressure on Friday after prominent hedge fund manager Dan Loeb, owner of Third Point, sold his stake in Snap.
Snap has traded below its list price of $17 since mid-July, with further steep falls since then as a string of brokers have lowered price targets on the stock.
Snapchat founders Evan Spiegel and Bobby Murphy last week said they will not sell any shares for a year in an attempt to signal their commitment to the firm as stock hit record low prices.