Sorry Snap Investors, But Some Say This Rebound Is Short-Lived

Snap Inc SNAP's run so far as a public company hasn't been a successful one. After flirting with the $30 per share mark shortly after its IPO debut, Snap's stock recently hit a low of $11.28 but has since rebounded by around $2 per share.

Technical Look

In reality, Snap's stock has done nothing but establish a "series of lower lows and lower highs," Craig Johnson, Piper Jaffray's chief market technician said during a recent CNBC "Trading Nation" segment.

Before investors can turn bullish on Snap's stock it would need to close above the $15 or $16 mark, Johnson said. But given the elevated short interest in the stock, the recent rebound off the lows is nothing but a relief rally or short covering. Over the longer term, there are still plenty of structural issues that can't be ignored.

Snap is "clearly" losing market share to rival Instagram and beyond that, the company has established a "weakening narrative that extends outside of the Street to advertisers who are deciding where to allocate ad spend."

Will Google Snap It Up?

Taking a somewhat different approach, Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management, argued during the "Trading Nation" segment that Snap is the only viable social media platform that Google can acquire.

Google has the necessary resources to "soup [Snap] up" and subsidize the business for years until they can figure out how to successfully monetize the platform, he added. For that reason alone, it might be foolish for investors to continue shorting the stock.

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