How to Buy Snapchat Stock

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Once Facebook spearheaded the social media movement at the beginning of the century, companies like Snapchat (SNAP) quickly sprouted up to fill the value voids left by the behemoth.

Snap is an American camera and social media company founded in 2011 by Evan Spiegel and Bobby Murphy. Snap is based in Santa Monica, California and has three products that drive revenue: Snapchat, Spectacles and Bitmoji.

The social media company made its debut on the New York Stock Exchange in March 2017. Since its initial public offering at $17, the company’s market capitalization has risen to $131B in 2021.

How to Purchase SNAP

Most major brokerage firms that trade securities will provide you with the ability to purchase Snapchat’s stock. Some basic ideas on how to acquire the stock:

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Snapchat at a Glance

Although most people forget the company’s original name “Picaboo,” Snapchat created a user experience through “Snaps,” which consist of either photos or short videos. Unique to Snapchat, the videos, photos and messages disappear after being viewed. The company provided value to users who wanted a way to have more casual and simplified interactions than applications like Facebook, Instagram, or various messenger apps.

Snapchat has gone through some interesting changes and events over the years:

• Video sharing functionality was added in late December 2012.
• A security flaw led to the hacking of 4.6 million users’ names and phone numbers in 2013-2014.
• Snapchat turned down an offer from Facebook in late 2013.
• In 2016, the company rebranded itself Snap, Inc.
• In 2019, Snapchat released new features such as Snap Games, which allows users to play games with their friends directly in the app.
•  Snapchat introduced Spotlight in 2020, a feature that allows users to share short-form videos in a TikTok-like format.
• Snapchat launched a new advertising platform called Snap Connect in 2023.

History of the Snapchat Stock

Snapchat went public in March 2017 with an initial public offering (IPO) price of $17 per share. The company had a successful debut on the stock market, with its shares surging by over 40% on the first day of trading. 

Following its IPO, Snapchat's stock continued to perform well, reaching an all-time high of around $29 per share in early 2018. However, the company faced challenges in the form of competition from other social media platforms like Instagram, which quickly adopted Snapchat's popular features such as Stories.

Despite these challenges, Snapchat experienced a surge in its stock price during the COVID-19 pandemic in 2020. As lockdowns and social distancing measures forced people to stay at home, many turned to social media platforms like Snapchat to stay connected with friends and family.

However, Snapchat's stock performance has been less than stellar in the past couple of years. The company has faced criticism for its handling of user data and privacy issues, as well as concerns about its ability to innovate and compete with larger tech companies.

As a result, Snapchat's stock price has experienced fluctuations and declines in recent years, falling below its IPO price at times. The company's stock has also been impacted by broader market trends, as well as investor sentiment towards the technology sector as a whole.

Source: tradingview.com

Why Purchase Snapchat Stock?

Similar to investing in any other stock, purchasing shares of Snapchat comes with its own advantages and disadvantages.

Pros of Buying SNAP

• Strong user base: Snapchat has a large, engaged user base, particularly among younger demographics. This loyal audience can be attractive to advertisers and potentially drive revenue growth.
• Innovation in augmented reality: Snapchat is a leader in AR technology, with features like lenses and filters.
• Potential for monetization: Snapchat has been improving its advertising platform and exploring e-commerce opportunities. These initiatives could lead to increased revenue per user and better profitability.

Cons of Buying SNAP

• Fierce competition: Snapchat faces intense competition from other social media platforms, particularly TikTok and Instagram. This competition could limit user growth and make it harder to retain existing users.
• Profitability concerns: Despite revenue growth, Snapchat has struggled to achieve consistent profitability.
• Dependence on advertising revenue: Snapchat's primary revenue source is digital advertising, making it vulnerable to economic downturns and shifts in ad spending.

Future Outlook

As is often the case with newly listed companies, Snapchat still remains a risky investment in the eyes of most analysts. The company currently grows at an exceptional rate, but has yet to temper its costs with growth.

If the company turns profitable like Facebook, the current share prices are a bargain. Time will ultimately tell whether Snapchat lives up to expectations.

Growing Your Portfolio With SNAP Stock

Snapchat’s price reflects what investors expect of the company. In order to justify the current share price, many individuals expect Snapchat to turn a profit at some point.

What you have to decide for yourself is if that’s true and when its value increase will be realized.

Frequently Asked Questions