This Is Why Snap Shares Are Suddenly Exploding

Snap Inc. shares soared higher on Monday, jumping over 5%, after it was revealed that several of the Snapchat owner’s IPO underwriters gave the stock “buy” ratings.

Snap was the largest IPO by a technology firm in the last three years when it went public on March 1st. Despite a strong initial first trading day, the stock has been volatile since and many investors have been concerned over the company’s profitability.

Snap Inc. is the company behind Snapchat, an app that allows users to share short-lived messages and pictures. Despite Snap warning that it may never become profitable, investors have been anticipating the company’s IPO.
Analysts had given the stock negative or neutral ratings in the last few weeks but these were analysts not related to the IPO. Eight banks however who were involved with Snap’s IPO, just released their own positive ratings.

Morgan Stanley and Goldman Sachs were among the two to rate the stock on a high note.

“SNAP’s engaged/hard-to-reach millennial users and unique video offerings should attract significant ad dollars,” said Morgan Stanley analyst Brian Nowak in a note to clients. Nowak gave the stock an “overweight” rating and a $28-price target.

JP Morgan analyst Doug Anmuth gave Snap a “neutral” rating.

Despite the concerns from investors, SNAP shares are still 40 percent higher from its $17 initial public offer price.

Disclaimer: We have no position in Snap Inc. (NYSE: SNAP) and have not been compensated for this article.