), the maker of the disappearing messaging app Snapchat, are far and few between with investors and many Wall Street analysts betting the company will fail to improve anytime soon. SunTrust Robinson Humphrey jumped on the bear train, starting coverage of the company with a sell rating.
In a research note covered by CNBC, SunTrust analyst Youssef Squali warned the stock will underperform for awhile as the company tries to shore up advertising dollars. Other reasons the analyst set a $10 price target on Snap: a “massive lock up expiration of shares in the last two weeks and intense competition from Instagram/Facebook for users and advertisers.” The analyst pointed to Facebook’s move to not only steal Snap features but be more successful at it. Take Instagram Stories, which is similar to a Snap feature but has 200 million users, which is larger than Snapchat’s entire user base. “Facebook/Instagram and YouTube are quick followers, constantly improving their value proposition as well, at materially greater scale,” he wrote according to CNBC. (See also: How Facebook Has Been Tracking Snapchat User Activity.)
How Far Down?
At $10 a share, Squali thinks shares can depreciate an additional 23%. The stock…