NEW YORK (Reuters) – Snap Inc (SNAP.N) shares fell 4 percent on Monday after U.S. securities filings showed some funds dissolving their stakes in the social media company and another brokerage lowered its price target on the stock.
Initial securities filings since Friday show Third Point LLC and Temasek Holdings dissolved their stakes in Snap entirely.
The new pressure on Snap’s stock follows a disappointing quarterly report last week that sent it down 14 percent on Friday to a closing low of $11.83, far below its IPO price of $17. On Monday, the shares fell another 3.8 percent to $11.38 after being among the most actively traded stocks before the market opened.
Instagram, which has adopted features from Snapchat, has 250 million daily active users, compared with Snapchat’s 173 million at the end of the second quarter, fewer than Wall Street had expected.
Cantor Fitzgerald, which rates the stock “neutral,” lowered its price target to $15 from $17.
“We remain on the sidelines until we see signs of re-acceleration in user growth, an inflection on Snap pricing… and/or get closer to the end of the lock-up expiration,” analyst Kip Paulson said in a research note.
That follows an expiry at the end of July on restrictions from early investors owning around 400 million shares.
To try to reassure investors, Snap Chief Executive Officer Evan Spiegel and co-founder Robert Murphy on Thursday committed to not sell any of their combined 422 million shares in 2017.
Close to 800 million shares become eligible for trading on Monday, including Spiegel and Murphy’s stakes, according to JPMorgan analyst Doug Anmuth.
Snapchat is popular among people under 30 who like decorating their pictures with bunny faces and other filters. But following the IPO, investors have become more concerned that it might never become profitable.
Reporting by Noel Randewich and Lewis Krauskopf; Editing by Lisa Von Ahn