Snap Inc. IPO Receives Cold Welcome From Wall Street, Boom Still Possible

It’s been several days since Snap Inc. finally launched its IPO, which has been creating a buzz for months. The first couple of days certainly reflected the hype that people felt over the prospect, but it has since died down. Now, those in Wall Street are already cautioning investors that Snap Inc. is a bad bet. Even so, there are those that believe that the IPO could lead to yet another market boom.

On the first day of the IPO, Snap Inc. shares jumped by 44 percent, The Motley Fool reports. On the second, it rose again by 11 percent. By the time the third day came around, it went down by 8 percent.

The drop is a sign that the market is starting to calm down from all the hype surrounding the IPO. After all, investors were looking at a company that was expected to open at almost $25 billion a few months ago. This would have made it the most valuable tech offering since Alibaba.

Naturally, this is the root cause to why investors are starting to wake up since many in Wall Street consider Snap Inc. to be significantly overvalued. Based on the valuation metrics that the different analysts are using to measure the tech firm’s worth, it would seem that practically all of them are coming to this conclusion.

As such, it was only to be expected that it would influence the decisions of investors that haven’t yet jumped on the bandwagon while dampening the hopes of those that already tossed their lot in with Snap. Even so, Fortune thinks that the new development might just yield an IPO boom, much like how it went when Google and Facebook went public.

In both cases, the IPO market certainly rose significantly, which may or may not be attributed to the success of the brands. However, with so much skepticism casting doubt on Snap, the future of the tech IPO market is in question.