Snap Inc. (NYSE: SNAP) shares fell below their initial public offering price for the first time this week after Morgan Stanley (NYSE: MS) issued a scathing report on the social media stock.
Morgan Stanley, a lead underwriter of Snap’s IPO in March, downgraded SNAP to equal weight from overweight while dropping its price target to $16 from $28. Morgan Stanley Analyst Brian Nowak cited concerns about Snapchat’s daily active user growth, which he suspects is declining, as well as delays in products that assist advertisers.
“We have been wrong about Snap’s ability to innovate and improve its ad product this year,” Nowak said in a note. Snap shares plunged to below their $17 IPO price on the report and continued to trade near $15.45 in Friday’s session. Shares fell 10 percent this week.
Blue Apron Holdings Inc. (NYSE: APRN) also traded well below its IPO price after shares launched on the New York Stock Exchange June 30 with an opening price of $10 per share.
Blue Apron stock, trading around $7.40 in Friday’s session, lost 4.5 percent this week as investors remain skeptical that the home-delivery meal kit service can compete with Amazon.com Inc. (NASDAQ: AMZN) in the long run. Amazon recently announced it will acquire Whole Foods Market Inc. (NASDAQ: WFM) in a $13.7 billion deal that has triggered suggestions it will use its Prime service to deliver groceries and dominate the market.
Meanwhile, Amazon.com shares are up more than 2 percent for the week after a boost from record Prime Day sales, which increased 60 percent and topped sales from Black Friday and Cyber Monday combined. Prime Day’s most popular item was the Echo Dot, which sold for $34.99, a discount of $15.
