- Snap (NYSE:SNAP) is off 17.9% after yesterday's earnings letdown, shedding a few billions in market cap and prompting analysts to rush to slash price targets -- and update their theses following word that Tencent (OTCPK:TCEHY) bought 10% more of the company.
- Shares are at $12.40 today, their lowest point in three months.
- UBS and JPMorgan (NYSE:JPM) cut their ratings to a Sell equivalent (and set price targets of $7 and $10 respectively).
- Stifel and RBC have set more modest downgrades, to Hold (and $13 and $15 targets respectively).
- Canaccord Genuity trimmed its price target to $12 from $15, arguing that the platform remains "inherently valuable" but: "For now, with no timeline apparent for the redesigned app rollout, we remain on the sidelines."
- And Wells Fargo (NYSE:WFC) (Market Perform) cut its target to $13 from $15: "Though we believe SNAP continues to steadily onboard advertisers eager to test the platform, we believe fundamental app design issues could prevent SNAP from seeing the type of steady monetization gains posted by key rivals Facebook (NASDAQ:FB) and Instagram."
- Pivotal, which reiterated a Sell rating, says it's "highly unlikely" that Tencent would ever buy Snap, with headwinds including issues around foreign influence in social media (and China's restrictions on foreign investment) along with current dependence on CEO Evan Spiegel (who has an 11% stake).
- Now read: Snap: Can You Trust Change?
Original article