That Didn't Take Long: Snap Initiated With A Sell Rating At Pivotal

Snap Inc's SNAP initial public offering is a few hours old, but Wall Street firms that didn't participate in the underwriting activity are coming out with their recommendations.

Pivotal Research Group's Brian Wieser initiated coverage of Snap with a Sell rating and $10 price target, notably below the $17 per share offering price and well below the $25 per share Snap was trading at early Thursday afternoon.

Speaking to CNBC, Wieser said the valuation on Snap's stock is "more than robust" especially given his revenue estimate of just $7 billion by 2023. The analyst suggested Thursday's strong performance is in part due to IPO euphoria and the thinking that "the next person will pay more for it."

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Wieser also attributed his bearish rating to the fact that Snap issues a large amount of shares. For example, the average Snap employee received last year $1.4 million worth of shares last year which is "stunning."

Wieser also argued Snap's corporate structure is "sub-optimal" and led by a management team that lacks the necessary experience in transforming a new product into a successful company.

"It's not to say that they can't be successful," Wieser explained. "But they haven't done it yet so there is some real risk. I could generate one billion dollars in revenue if you gave me $2 billion today. That wouldn't make me successful."