Snap Inc (SNAP.N) stock saw modest recovery on Monday, August 14, from a record low hit earlier in a choppy trading session as big investors report their latest stakes in the beleaguered social media company and as a wave of employees became eligible to sell their shares.
The shares were up 5.2 percent at $12.44 in morning trading after falling as much as 4.7 percent to $11.28 shortly after the market opened, their lowest point since their March debut.
Within just 45 minutes of regular trading, volume had already reached half of the stock’s daily average for the past 10 days.
Starting on Monday, employees for the first time are allowed to sell their stock following the Snapchat parent’s blockbuster initial public offering, potentially increasing the supply of shares in the market and their volatility.
Monday is also the deadline for hedge funds and other institutional investors to report their quarter-end holdings of U.S. equities.
T. Rowe Price Group Inc (TROW.O), a mutual fund manager that is Snap’s fifth-largest shareholder, hiked its stake by about a third, according to filings on Monday. That comes after BlackRock Inc (BLK.N), the world’s largest asset manager, and Coatue Management LLC, a hedge fund that is Snap’s sixth-largest shareholder, also increased their stakes, recent filings said.
Third Point LLC, Jana Partners and Temasek Holdings dissolved their stakes in Snap entirely, filings since Friday showed. Fidelity Investments, Snap’s seventh-largest shareholder, said in filings last week that it cut its holdings by more than half, from more than 33 million shares to about 15 million.
Trading sentiment in Snap’s options leaned toward bullishness. Contracts betting on the shares’ rising above $14 by mid-September were the most actively traded for the company for the near term.
Monday’s stock rise follows a disappointing quarterly report from Snap last week that sent its shares down 14 percent on Friday to a closing low of $11.83, far below its IPO price of $17.
Snap has also been a target of short sellers, with 5.5 percent of its shares outstanding shorted as of Thursday, according to Thomson Reuters data.
The stock holds a higher-than-average likelihood of a short squeeze, where the price rises as short sellers rush to cover their bets, according to Starmine data.