Snap Inc SNAP 10.66% couldn’t even make it through its first day of trading before receiving its first Sell rating on Wall Street. After Pivotal Research Group initiated coverage of Snap at Sell on Thursday, Instinet followed up with a Sell rating of its own.
Big tech IPOs have a poor track record when it comes to their first year of trading. In fact, eight out of the 10 largest tech IPOs in history declined between 15 and 71 percent in their first year on the public market.
The Snap short trade is a popular idea among retail investors, but shortable shares will initially be hard to come by. Retail investors who were unable to short shares of Snap on Thursday may have better luck on Friday. According to a representative from E*Trade, the firm expects to have Snap shares available to short immediately after the market open on Friday. The representative told Benzinga customers must be enrolled in the firm’s Hard to Borrow program due to Snap being listed as a hard to borrow security.
IPO underwriters are forbidden by rule from lending out shares of the IPO stock within the first 30 days of trading. That means that firms such as Goldman Sachs, Morgan Stanley, Bank of America, JPMorgan Chase, Deutsche Bank, Barclays and Credit Suisse will not be able to lend their shares for the time being.
Fortunately for potential short sellers, they didn’t appear…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
