Fortunes in the stock market can rise so easily then drop just as quickly at any time. Similarly, what seems like a sure fall from contention can be arrested by a quick recovery. This is the recent story of Snap Inc., the parent company of the popular social media app Snapchat.
Ever since it took the plunge and went public with a March IPO, the tech firm’s stock market standing has seen a gradual decline after an initial rise. Things got even worse when the lockup period for divesting Snap Inc. shares expired not long ago, with a marked 5% stock drop.
But then news that Google had attempted to acquire Snapchat in the past has led to a dramatic turnaround.
Google's interest
A report by Alex Heath of Business Insider has revealed that Google, the current juggernaut in web search (and other internet things), had tried multiple times to buy up Snapchat since last year. The first was said to be in the aftermath of the then-private startup’s Series F funding round, which saw their value climb to $20 billion. Google offered $30 billion, only to be rebuffed by Snap Inc. CEO Evan Spiegel. A second attempt was supposedly made shortly before the firm announced their intention to offer IPO, and at the same price to boot.
Again Spiegel demonstrated to Google executive chairman Eric Schmidt that he was possessed of an independent spirit for his company.
Snap Inc. went public to a valuation of $24 billion, which soon began to go down, dipping below their IPO level recently. Heath’s report would have it that Google’s $30B offer is said to remain on the table.
Quick recovery
Once news of this came out, there was a remarkable bounce back from Snap Inc.’s original downward trend, with share prices climbing up to about 2.3% all told.
This is extremely positive news for the outfit, which had been worrying about its Snapchat app being dropped by users in favor of WhatsApp Status and Facebook Instagram Stories - the latter of which has blatantly copied many of Snapchat’s features.
The reactions of both Google and Snap Inc. to the Business Insider report were not long in coming.
Evan Spiegel immediately dismissed Alex Heath’s report as “false rumors” while Google chose not to comment. There is the possibility that the latter’s $30 billion acquisition price remained nothing more than a preliminary inroad, with no actual negotiation actually occurring. Regardless, due to the stock recovery brought on by the report, Snap Inc. is now at a market value of $15.2 billion, just over half of Google’s rumored offer
