If You Invested $1,000 In Snap At IPO, Here's How Much You'd Have Now

One of the hottest IPOs of the 2010s was that of social media company Snap Inc SNAP. The parent company of Snapchat was one of the emerging social media companies hoping to replicate the success of Twitter, Facebook and others.

Here’s a look back at the IPO and what has happened since.

What Happened: Snap went public on March 2, 2017 at $17 a share. At the time, the company was valued at $24 billion, marking one of the biggest IPOs in several years.

The company raised over $3 billion and was crowned by many for years of future growth. Shares opened for trading at $24 and closed up over 40% in their first day of trading.

Over the years, optimism continued for Snap with augmented reality efforts, short-form video and continued growth of its social media platform — best known for disappearing messages.

Snap recently reported fourth quarter financial results that continued a trend of declining advertising revenue and several macro headwinds impacted the company’s business.

Once a darling during the high growth stocks period, shares of Snap have pulled back with some analysts questioning the company’s future growth efforts and a line of sight to profitability.

Investors who got in on the Snap IPO would have had mixed results, depending on if they sold or are still holding shares.

Related Link: Snap Is A 'Snow Globe In A Snowstorm,' Why Analysts Are Lowering Price Targets After Q4

Investing $1,000 in Snap IPO: Snap went public on March 2, 2017. While shares opened for trading at $24, some investors may have been able to scoop shares up during the public offering at a price of $17 per share, which is the reference price for this exercise.

A $1,000 investment could have purchased 58.82 shares of SNAP stock. The $1,000 investment in SNAP would be worth $584.08 today, based on a price of $9..93 for SNAP at the time of writing.

This represents a loss of 41.6% since the 2017 IPO. Over the last six years, the investment would be down an average of 6.9% annually.

It might not be all bad for investors who bought in on the Snap IPO or shortly after. Snap shares hit an all-time high closing price of $83.11 in September 2021. The $1,000 investment would have been worth $4,888.53 at the time, up 388.9%.

Investors who ignored the Snap IPO and instead invested in a broad market index ETF like the SPDR S&P 500 ETF Trust SPY have fared better.

A $1,000 investment in the SPY at the same time of the Snap IPO would be up 68.8% since March 2, 2017. This represents an average annual gain of 11.5% over the last six years.

Investors have several takeaways from the hypothetical investment. One lesson could be that it’s important to consider taking profits on investments or selling part of a position. Investors who sold a portion of the gains from Snap at all-time highs in 2021 would still be in the green on the trade.

Another lesson is that high growth stocks don’t always outperform the market. Often times, when high growth companies hit the public market they are hyped by analysts and investors and have high expectations. If the expectations aren’t met or new competitors emerge, investors often sell and look for their next trade.

Read Next: Trading Strategies For Snap Stock Before And After Q4 Earnings