Retail traders say Snap stock is an inflection point after a 3.8% jump on Thursday.
- Snap shares are still down about 40% from their recent peak on Jan. 6.
- Some retail traders believe the stock has passed its bottom and will rise sharply from here.
- Snap recently announced a $1 billion revenue run-rate for its subscription business.
Snap Inc.’s stock remains less than a dollar away from its 52-week low of $4.65, with some insider sales adding to the bearishness surrounding the social media company. Still, signs of retail-trader bullishness have re-emerged as SNAP heads for its second straight weekly gain.
Two senior Snap, Inc. senior leaders sold company shares recently, disclosures on Thursday showed. Chief Business Officer Ajit Mohan 119,339 shares for about $561,060, while Zachary Briers, Snap’s general counsel, sold 203,325 shares for about $958,120. Following the trades, Mohan and Briers own 5.2 million shares and 2.8 million shares of Snap, respectively.
The transaction comes just as Snap stock shows a nascent rebound, catapulting it to the top of retail investors’ radars. SNAP shares rose 3.8% on Thursday, their best move in over a month, and have gained in six of the last seven sessions.
Several users on Stocktwits noted that the stock could be at an inflection point after a sharp slide in recent months. “I really think profitability will change everything from now on. This will mark the reversal back to double digits,” said a user.
“$SNAP pretty sure it bottomed,” another said. “Just needs to consolidate and retest the low. Accumulation time.”
The Stocktwits sentiment, however, remains in the ‘bearish’ zone, unchanged since Wednesday, although a 24-hour message volume spike of 32% shows that SNAP remains actively discussed by retail traders on the platform.
Last week, Snap announced that its direct-revenue business has reached $1 billion in annualized revenue run rate, driven by growth in its Snapchat+ subscription service. That segment includes Snapchat+, the Memories photo-and-video archive tool, and in-app purchases.
That announcement came after Snap reported an upbeat fourth quarter: revenue rose 5% to $ 474 million, while active users on the platform increased 28%.
Earlier this week, Morgan Stanley lowered its price target on Snap stock to $6.50 from $9.50. The company's core business is performing better than expected, but clarity on when Snap will add $400 million in "high-margin" revenue under its agreement with Perplexity will matter next, as the companies remain in talks, the research firm said.
Snap stock has been a major casualty in the ongoing tech selloff, falling about 40% from its recent peak on Jan. 6.
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