(Repeats story first published on Sunday)
By Angela Moon
NEW YORK, March 12 For some millennial
investors, loyalty to one of their favorite apps matters more
than financial details in the case of Snap Inc.
The stock of Snapchat's parent company has been on a
roller-coaster ride since its market debut last week, surging
more than 70 percent from the initial public offering price in
the first two days of trading and plunging back down by a
Some seasoned investors have been wary of the volatile,
relatively high-priced stock of a company that has yet to report
a profit. But novice investors said their deep affinity with the
disappearing-message app prompted them to jump in.
"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, who has only been trading stocks for about a
month on Robinhood, a mobile trading app popular among
Snap sold shares at $17 a piece in its IPO on March 1. The
day after, on the first day of trading on the New York Stock
Exchange, the stock popped as high as $26.05.
Roh said he bought the stock on that first trading day at
$25 a share.
Trading activity on Robinhood jumped by 50 percent on the
day of Snap's debut, with more than 40 percent of those who
traded that day buying Snap shares. The median age of Snap
shareholders on the platform were 26, the same age as Snap Chief
Executive Evan Spiegel, according to Robinhood.
Snap's surge extended into the second day of trading, March
3, when its stock went as high as $29.44. It has sunk 25 percent
since, closing on Friday at $22.07.
Kaleana Markley, a 29-year-old human resources consultant in
San Francisco, bought Snap shares as her first stock market
"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, who bought the
shares through Stockpile, another online brokerage aimed at
millennials, generally defined as people reaching young
adulthood in the early part of this century.
Markley said she bought some shares in Snap on the first day
of trading and some more on the second day, when the stock hit
the highest level of its short lifetime.
"There are a lot of companies I don't know or recognize, but
Snap, I use the product, and know everyone - my friends, my
co-workers, even my parents - uses it."
Although some more experienced investors have avoided
loss-making Snap, millennials were not alone in their hunger for
shares of the company, which now has a market value of more than
Many sophisticated institutional money managers were also
intent on getting a piece of the hottest tech IPO in years,
despite concerns about the company's slowing user growth and
lack of voting rights for new shareholders.
Snap declined to comment on trading in its shares.
Companies with especially enthusiastic customer bases, such
as action-camera maker GoPro Inc, social games company
Zynga Inc and English soccer club Manchester United Plc
, have in the past attracted fans to dabble in their
But the wildly popular Snapchat - with an average of about
158 million daily active users - appears to be taking the
enthusiasm to another level, some analysts and brokers said.
"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."
Snapchat's users, mostly in the 18-34 age range coveted by
advertisers, spend an average of 25 to 30 minutes on the app and
visit it more than 18 times a day, according to the company,
making it more visited than any other social media platform.
"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.
Snap's IPO gave Stockpile its biggest single day since it
launched in 2015, nearly 10 times the service's daily average in
transaction and sales.
"Snap is offering the comfort of buying something that you
know so well, understand and use it every day, which is what
these young investors want," said Schatt, whose teenaged
daughter and son also bought Snap shares with his approval on
On StockTwits, a Twitter-like platform for sharing trading
ideas, where 40 percent of users are between the ages of 18 and
34, Snap has been the most talked-about stock for days.
There are concerns about slowing user growth and competition
from Facebook Inc. The overall sentiment on the stock is
now 44 percent bullish and 56 percent bearish, compared to early
February when bullish sentiment was 100 percent, according to
That has not deterred Tiffany Dun, a San Francisco-based
mortgage consultant in her late 20s who purchased 125 shares in
Snap on the first day of trading at about $22 a share.
"There's always risk to everything," she said. "I use the
product and I like it, so I bought some."
(Reporting by Angela Moon; Editing by Jonathan Weber and Bill