Wow080p Archives Wall Street actually likes Snapchat.
A bunch of banks unleashed their feelings — or rather their sophisticated reports — on the company named Snap Inc. on Monday. And it was pretty damn good for the sexting app-turned-digital juggernaut.
SEE ALSO: Evan Spiegel has already made $1.5 billion off Snapchat's IPOFor the ratings: Snap now has 12 "buy", 11 "holds" and six "sells," Bloomberg reported. Goldman Sachs, Citi and Jefferies are all cheering buy! "Outperform," shout RBC Capital, Credit Suisse and Cowen.
This all comes after a tough first month for Snap Inc. The stock opened at $24, rose to $29, but fell to below $20 on March 17. Now, it's back up to $24 and Wall Street is putting forth price targets as high as $31.
So why all the good news for Snap? Mark Mahaney, an analyst at RBC Capital Markets, probably put it best in his research note [emphasis ours]:
Snap has become an innovation leader- for both consumers and advertisers - in arguably the single fastest advertising medium today - mobile.
It has also emerged as one of the leading media platforms for millennials. We believe that if it sustains its current level of innovation, it can sustain premium growth for a long time and scale to profitability.
Wall Street is placing their confidence in Snap and its CEO Evan Spiegel. They believe that Spiegel and his team can innovate and win mobile, even while they are competing against the advertising duopoly of Facebook and Google.
There just seems to be something powerful about Snapchat.
Original image has been replaced. Credit: Mashable What's most strange here is the story seems to be quite the opposite over in Silicon Valley. If you were to browse through the recent headlines on TechCrunch, SV's trade publication, you may be scared of the idea that Facebook, with its mighty Instagram, Messenger and WhatsApp, will SQUASH little Snapchat.
Just look at this illustration that TechCrunchreleased Sunday:
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It appears that Instagram and Facebook are going to make Ghostface Chillah (Snapchat's ghost mascot) EXPLODE!
But, not so, bets Wall Street.
"We believe Snap has all the ingredients to build a robust advertising business," Brian Fitzgerald of Jefferies wrote in a research note.
So it appears that Wall Street is putting Madison Avenue (the hub of advertising) on Team Snapchat. We know that Hollywood is already into Snap. MGM Television, the global distributor behind shows like Fargo(FX), The Voice(NBC) and Shark Tank(ABC), just inked a big deal, Mashablereported.
Digital media is placing bets on it as well, putting teams of reporters and illustrators on their daily or weekly editions. The New York Timesis just one of many older media brands that have dedicated themselves to the app.
Yet, Silicon Valley looks to their local powerhouse Facebook and glances sadly at Twitter, which has recently seen a mass exodus of top leaders and has had to rent out floors of its Market Street real estate.
When Snapchat made its IPO debut, the tech press and bearish investors cautioned that it would become another Twitter, as in a stock beaten by Wall Street:
Original image has been replaced. Credit: Mashable For now, Snapchat has convinced the Street that it has potential and that it is truly innovative.
The question, as positioned by Bloomberg: Will that faith disappear?
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