Cramer's Bearish Case On Snap Fades Ahead Of Lock-Up Expiration

On Tuesday, CNBC's Jim Cramer laid out his bearish thesis against Snap Inc SNAP, noting that a recent downgrade by analysts at Morgan Stanley is akin to an "obituary." Tuesday evening, he double downed and blasted the social media company for being "anything but profitable."

Coinciding with the Morgan Stanley downgrade note and Cramer's comments, shares of Snap hit an all-time low of $15.21 on Tuesday. But on Wednesday, Cramer laid out the case why Snap's stock could rebound, albeit temporarily.

Analysts at Stifel issued an upgrade note on Wednesday — a call Cramer doesn't hate. Specifically, the analysts believe that investors are overreacting and wrongfully punishing the stock.

"There's a subtle moment in this call," Cramer said during CNBC's "Squawk on the Street" segment. "The implication was, don't fear the lockup expiration as much."

Snap's insiders will soon be able to sell their holdings as part of the standard lock-up period, Cramer continued. But at $15 per share insiders will have little to no interest in unloading their shares. On the contrary, insiders will likely be buying the stock at current levels and could result in a short squeeze in the stock which will boost shares higher.

"Next thing you know you get [Snap's stock] back to $17 as insiders say, 'Our stock is cheap,'" Cramer added. "After that ... it's whatever."

At last check, shares of Snap were up 3.51 percent at $15.77.

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