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Snap Stock Extended By Millennial’s Love For Snapchat

Snap Stock Extended By Millennial’s Love For Snapchat
Loyalty to one of their favorite apps matters more than financial details in the case of Snap Inc. for some millennial investors.
Surging more than 70 percent from the initial public offering price in the first two days of trading and plunging back down by a quarter since, the stock of Snapchat's parent company has been on a roller-coaster ride since its market debut last week.
The volatile, relatively high-priced stock of a company that has yet to report a profit has made some seasoned investors wary. But prompting them to jump in is their deep affinity with the disappearing-message app, said some novice investors.
"I bought it even when I was pretty positive I would not make a profit in the short run, but just because I am a fan of the product," said Chris Roh, a 25-year-old software engineer in San Francisco. He has been using Robinhood, a mobile trading app popular among millennials to trade and has only been trading stocks for about a month.
In its IPO on March 1,Snap sold shares at $17 a piece. The stock popped as high as $26.05 the day after, on the first day of trading on the New York Stock Exchange. 
For $25 a share, he bought the stock on that first trading day, Roh said.
With more than 40 percent of those who traded that day buying Snap shares, trading activity on Robinhood jumped by 50 percent on the day of Snap's debut. According to Robinhood, noting the same age as Snap Chief Executive Evan Spiegel, the median age of Snap shareholders on the platform were 26.
when its stock went as high as $29.44, Snap's surge extended into the second day of trading, March 3.
Snap shares as her first stock market investment was bought by Kaleana Markley, a 29-year-old human resources consultant in San Francisco.
"Snap just felt like the IPO of my time and seeing where Facebook and Amazon are now, I really think Snap has the potential to grow (like them)," said Markley. Stockpile, another online brokerage aimed at millennials, was used to buy the shares.
In the past, fans have been attracted to dabble in their IPOs by companies with especially enthusiastic customer bases, such as action-camera maker GoPro Inc, social games company Zynga Inc and English football club Manchester United Plc.
But some analysts and brokers said, appearing to be taking the enthusiasm to another level, is the wildly popular Snapchat - with an average of about 158 million daily active users.
"One of the non-fundamental reasons driving the stock is that many millennials purchased Snap shares at inflated levels due to their preference for the product," said Shebly Seyrafi, managing director at FBN Securities. "That is, not due to a real understanding of the number or valuation."
According to the company, snapchat is made into a more visited site than any other social media platform as its users spend an average of 25 to 30 minutes on the app and visit it more than 18 times a day, and its users are mostly in the 18-34 age range and are coveted by advertisers.
"Snap is tapping into the pride of ownership (for millennials) which we don't see often in the stock market," said Dan Schatt, chief commercial officer at Stockpile.

Christopher J. Mitchell

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