Snap: Back to the $11 Level

Snap (NYSE:SNAP) rose ~18% last week alone after BTIG, a long-time bear, upgraded the stock. If its return to roots, which undoes the awful app revamp, brings back its users, then the stock is not likely to fall back to the single digits in 2019. Still, the analyst’s upgrade is a 180-degree turnaround from an analysis made just four months ago.

BTIG wrote: "The company is burning cash, and raising new capital will not be easy; User growth is sliding; Story/discover engagement is falling; There’s been a dearth of product innovation; Influencers are spurning the platform;Ad quality is falling."

Time will tell if Snapchat’s ad revenue will improve. Last quarter’s user activity sent the stock higher and did not need the analyst upgrade to get there. Plus, executive management changes and a lack of insider selling pressure could make this stock a good speculative trade in the near-term.

At a time when Facebook is determined to consolidate WhatsApp, Facebook, and Instagram to centralize control and personal data privacy, Snap has a chance to win back Instagram users. Twitter (NYSE:TWTR) continues to alienate its users through random censorship and account de-activations that Snap will be a more appealing messaging and content platform for users.