As Snap stock falls, Spiegel’s massive fortune is slowly evaporating.
Though it skyrocketed in the days immediately after its public market debut earlier this month, Snapchat parent company Snap has seen its stock slide in recent weeks, as investor euphoria in the disappearing photo- and video-messaging company has cooled. While early investors raced to pick up shares of Snap and sent its stock surging 44 percent on the day of its I.P.O., multiple analysts have since assigned Snap a “sell” rating. Nearly two weeks later, Snap’s stock is still falling: on Friday, Snap’s stock briefly fell below $19 per share—just about $2 higher than its I.P.O. price.
The biggest loser is 26-year-old co-founder and C.E.O. Evan Spiegel, whose net worth has proven to be just as ephemeral as the messages millions of people send with his app. Spiegel, who owns just over 200 million shares of stock, saw his fortune swell to around $6 billion on the fourth day of Snap’s existence as a public company, as the share price bounced around $28. (His Class C shares, which give him voting power denied to ordinary Snap investors, are likely worth even more.) Since then, however, his net worth has plunged approximately $2 billion as Snap’s stock has fallen back toward its debut price. The $850 million bonus he received for taking his company public might help matters, but that drop has still got to sting.
It’s been a rough first month so far for Snap. Six Wall Street analysts assigned Snap a “sell” rating this week, and three have given it a “hold” rating. None have recommended buying shares in the unprofitable, five-year-old social media company. Snap’s I.P.O., during which the company raised $3.4 billion and opened at $23.77 per share, was considered one of the hottest consumer tech I.P.O.s recently, particularly given the dearth of private tech companies going public in the past several years. But there remains some hesitation over Snap’s future, growth prospects, and ability to make money off its users. Skeptics wonder if Snap’s valuation remains too high, given that it’s still unprofitable and geared primarily toward teenagers, a notoriously fickle audience
There’s also the looming existential threat of Mark Zuckerberg and his propensity for copying Snapchat in any conceivable way. Facebook, Instagram, and WhatsApp have repeatedly attempted to incorporate Snapchat’s functionality into their own apps. They achieved limited success until the advent of Instagram Stories, which has reportedly detracted from Snapchat’s already slowly-growing user base. Spiegel’s got plenty of space to fall before dropping out of the rarified Three Comma Club, but the pressure is on.