Business Liquidity

Morning Report: Snap Rebounds Towards Opening Price, Pushing Back Against Skeptics

Morning Report: Disobeying market skeptics, Snap has quickly regained lost ground, reapproaching its opening price.

If you currently sail aboard the HMS Snap Will Sink, it’s not a great day. Instead of racking up losses in a broadly down market today, Snap shares are up 4.58 percent to $23.80.

At that price, Snap, the parent company of the popular Snapchat mobile application, is just a few dimes per share under its opening price of $24. Both price levels are dramatically above its $17 IPO price and stiffly beneath its current all-time high of $29.44.

We are about to leave our frantic tracking of Snap’s share price behind us as the firm settles into life as a public company, but we’re highlighting where Snap is at today since its moves in the public market impact a host of other tech shops.

Here’s why:

  • By rebounding to its opening price, Snap is proving that money-losing tech companies earlier in the maturity curves can not only command huge revenue multiples at IPO, but also defend them—at least to some extent. That’s bullish for other money-losing tech shops that might want to debut. (Spoiler: that’s nearly all of them.)
  • We are heading into earnings seasons, marking Snap’s first as a public company. It’s a key moment for any newly-minted public firm, but given the number of well-discussed questions hanging over Snap’s investor relations teams, the day has even more import.

Which, of course, implies that Snap’s current success could be tenuous.

If Snap performs poorly during its first earnings cycle, it could lower market demand for IPO shares, harming a liquidity cycle that was just beginning to trot. As of today, investors are not betting that this will happen.

At the moment,  Snap is looking good. It’s moving against a down market back towards an important, if artificial, price threshold. But there’s always the next thing:

Today in the Crunchbase Daily:

Uber rival Grab said to be raising $1.5B

Grab, the ride-hailing service popular in Southeast Asia, plans to raise more than $1.5 billion in a new round backed by SoftBank, according to a Bloomberg report citing unnamed sources. The Singapore-based company closed on $750 million last year in a Softbank-led round.

Placester raises $50M for real estate marketing

Placester, a provider of marketing tools for real estate professionals, has raised $50 million in a Series D round led by New Enterprise Associates. The Boston-based company, founded in 2008, has raised a total of $100 million to date.

Funding rises for travel startups that aren’t Airbnb

Over the last four calendar years, Airbnb accounted for about half of all startup funding for the travel, hotel and accommodations industry, according to a Crunchbase News analysis. Yet investment in other travel startups has been growing too. Between 2014 and 2016, the total invested into the rest of the travel market increased by around 250 percent as companies like Jetsmarter, Wheels Up and HotelTonight raised big rounds.

Featured Image via Flickr user TechCrunch under CC BY 2.0. Image has been cropped.

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