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Paul Meeks, Mark Mahaney Talk Snap's Lockup Expiration

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Paul Meeks, Mark Mahaney Talk Snap's Lockup Expiration

Shares of Snap Inc (NYSE: SNAP) were trading lower by around 3 percent early Monday morning ahead of the expiration of its share lockup period, which paves the way for hundreds of millions of shares to be unloaded in the open market for the first time ever.

But before jumping to any conclusion as to what will happen to Snap's stock, it might be best to take a wait and see approach. If Snap's CEO Evan Spiegel and co-founder and current chief technology officer Bobby Murphy are willing to sell some of their stock in the open market below the IPO price it will serve as a "red flag for all of us," notable tech investor Paul Meeks told CNBC.

And if Spiegel and Murphy are OK with selling their stock below $14 per share, this means "all of us should sell our shares," he continued. After all, few if anyone else knows the company better than its co-founders and two most senior executives.

Mahaney: Earnings A Better 'Indicator'

There is always selling pressure heading into any share lockup expiration and Snap is no different, RBC Capital Markets' Mark Mahaney separately told CNBC. As such, Snap's earnings report on Aug. 10 should be seen as a better "indicator of what happens to the stock."

Meanwhile, Mahaney is "sticking with" his $31 price target, as there are two catalysts ahead that are perhaps under-appreciated. First, Snap should benefit from a re-acceleration in daily active users at the end of this year or early next year as the company fixes an ongoing Android integration problem and roll-out new features.

Second, Snap's new self-serve Ad Manager could help "stabilize" advertising revenue moving forward.

"You got those two factors or one of those two factors [that are] the catalyst behind the stock," he said.

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Latest Ratings for SNAP

DateFirmActionFromTo
Oct 2019UpgradesUnderweightEqual-Weight
Oct 2019MaintainsNeutral
Sep 2019UpgradesNeutralBuy

View More Analyst Ratings for SNAP
View the Latest Analyst Ratings

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