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Oh Snap!
"A month ago, we were talking about the rebound of resistance, fast forward to today, and we are now down below support," said CNBC's Power Lunch on Wednesday. . "It's the so-called proverbial fall knife". Shares are expected to get worse before they improve. "
Snap shares are in free fall, down more than 66% since their highly anticipated launch on the market in March 2017, as competition for users in the social sphere intensifies. According to BTIG, Facebook's adoption of "Stories," a popular 24-hour photo and video sharing feature, now attracts more than twice as many daily active users as Snapchat.
Boris Schlossberg, managing director of FX Strategy at BK Asset Management, believes that Snap's inability to follow Facebook puts him at risk of becoming the "next social Myspace".
Facebook has completely destroyed [Snap] with Instagram stories, "he said," The next big hit might be that advertisers simply go all the way to Instagram, where the audience is maximum. "
Despite Snap's inability to post gains, Schlossberg warns of stock shortening as its decay value could make it a potential target for withdrawal.
"[Snap] could be a take-away candidate, for example for Alphabet, who could really use a backend in the social, but otherwise it's really a dead man who walks and I do not want to own this stock, "said Schlossberg.
Snap closed down 7% Wednesday, at $ 9.20 per share. Its price slightly increased Thursday before the commercialization.
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