According to some Wall Street bigwigs, there are plenty of reasons to own Snap Inc. (NYSE:SNAP), the creator of Snapchat, which went public yesterday….
Those bigwigs, by the way, aren’t analysts, but the underwriters of Snap’s IPO…
Morgan Stanley and Goldman Sachs just pocketed a cool $20 million each (and counting) to debut the company.
Good cheerleading on their part, and the rest of Snap’s underwriters (J.P. Morgan, Deutsche Bank, Barclays, Credit Suisse, and Allen & Co.) will drive up Snap’s price. This will allow them to exercise a “greenshoe” option to sell an additional 30 million shares – for more fees, of course.
None of these Wall Street heavyweights have initiated analysts’ coverage of Snap, and probably won’t for a while. Or, to be perfectly honest with you, ever.
If the reasons to own Snap come from underwriting cheerleaders, who aren’t going to let their analysts cover it, you need to know the real score… and the reasons underwriter’s analysts won’t ever cover Snap.