Snapchat soars again on second day of trading

Snap Inc., the parent of Snapchat, has been off to the races with its debut on the stock market.

Yesterday, the stock closed at $24.48, a 44% gain from the IPO price of $17. And today it’s gone up a bit further, surpassing $29 at one point, an almost 20% increase from the close of yesterday. Shares later fell to $27, but it’s still on track for a 10% gain for day two.

This is another sign that Snap left money on the table. Even if they sold their shares for $19 or $20, they would have made a good first impression on the stock market and netted themselves hundreds of millions more dollars.

But there’s no guarantee that this surge will continue. Often, the initial excitement surrounding IPOs dies off.

And there are growing problems for Snap, which faces a competitive landscape. Atish Davda, CEO of EquityZen points out,  the company’s”growth is slowing and still faces tremendous pressure from Facebook and has to prove its long term viability.”

Facebook-owned Instagram replicated Snapchat’s “stories” feature last year and quickly saw tremendous success. It seems that Snap’s slowed user growth occurred around that time.

As of today’s trading, Snap now has a market cap of about $38 billion. This is substantially higher than their private market valuation and it’s also a bit larger than some major consumer brands like American Airlines and Hilton. 

Time will tell whether their trajectory looks more like Facebook, which has grown substantially since its 2012 IPO or Twitter, which has been subject to significant volatility.

FEATURED IMAGE: BRYAN R. SMITH/AFP/GETTY IMAGES