Analyst: Snap Investors Were Sold Snake Oil

Snap Inc SNAP shares are down another 11 percent Friday morning to just over $12 after the company reported lower-than-expected user growth and revenue and a larger-than-expected earnings loss. While Snap investors have been caught off guard by the company’s growth struggles and its eroding share price, at least one Wall Street analyst has been banging the table that Snap is a terrible investment since day one.

Global Equities Research analyst Trip Chowdhry is never one to mince words, and he’s taken a decidedly bearish stance on Snap since well before its $17 March IPO.

Back in January, Chowdhry said the market is now at the tail end of the social media boom, and Snap is essentially the bottom of the barrel.

“Fundamental investors should avoid the IPO,” he said at the time. “Snapchat is a total junk, hyper-inflated.”

Related Link: Report Says Google Was Once Interested In Acquiring Snap Last Year

Chowdhry went on to say Snap has absolutely no positive fundamentals, and a generous valuation would be $12 per share.

At the time, Chowdhry’s opinion was in the minority among Wall Street analysts, but his assessment has been spot-on up to this point.

So, what does Chowdhry think of Snap now that it may actually hit that $12 target? On Friday morning in an email to investors, Chowdhry said nothing had changed about his opinion that Snap is “total junk.”

”The underwriters and sell side were just peddling snake oil to the [IPO] investors,” he said.

He compared the stock to Zynga Inc ZNGA, which priced its IPO at $10 back in 2011 and is now trading at around $3.60.