Is Snap Inc (NYSE:SNAP) a Good Investment?

July 31, 2017, 11:02 am ET, BY Simon M.- Contributor| Editor: Thomas H. Kee Jr. (Follow on LinkedIn)

According to recent media reports, three top executives have left Snap Inc (NYSE:SNAP) in the past two months. This is just one of the issues facing the Snapchat parent company, which has also recently reported a $2.2 billion loss in its first quarter earnings.

Snap Inc is facing a major hurdle as its share lock-up period expires this week, which means that early investors and company insiders can now sell their shares on the open market. A research study on share lock-up expiration trends analyzing trends in venture-backed companies such as Snap revealed that in most cases, the stocks of such companies usually decline upon such expirations.

This is just one of the factors that might force investors to stay away from Snap as they take a wait- and- see approach towards the stock over the next two weeks. Given that Snap Inc is currently unprofitable heightens the risk that its stock might experience a major drop.

However, Snap has significant potential for growth given that its Snapchat app is significantly more attractive to the millennial and other younger generations as compared to its main competitors.

Although Facebook Inc (NASDAQ:FB) has posed stiff competition to the image and video sharing app, the company has a lot of future growth potential by refining its application to address the needs of generation Y and Z users.

Snap Inc has to reassure investors that the recent personnel changes will not affect the company’s operations negatively and that the new executives have the necessary skill and experience to turnaround the company.

Many analysts believe that the company has huge potential for growth if it unlocks the hidden potential in its Snapchat application and streamlines its operations.

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