Snapchat stock, SNAP stock, social media stocks, SNAP stock news

The social media giant plans on cutting 20% of its staff

The shares of Snap Inc (NYSE:SNAP) reversed course this morning, last seen up 12.7% at $11.28, after the firm said it would cut 20% of its staff in an effort to restructure its advertising sales unit, while putting the breaks on novelty projects like its flying drone camera and mobile games. This announcement comes directly after reports that two of the social media company’s senior advertising executives — chief business officer Jeremi Gorman and vice president of ad sales for the Americas Peter Naylor — have left the company to work for Netflix (NFLX).

The news that Netflix had poached several key members of Snap’s staff had analysts rushing in with bear notes. No less than three brokerages have lowered their price targets, including Citigroup, which slashed its price target to $10 from $16. The analyst also downgraded SNAP to “neutral” from “buy.” 

While most members of the brokerage bunch were hesitant on the Snapchat parent headed into today, there are still some holdouts. Of the 29 in coverage, nine considered SNAP a “strong buy,” compared to 18 “hold” ratings, and two “strong sell” ratings. Meanwhile, the 12-month consensus price target of $17.56 is a lofty 93.2% premium to last night’s close which could spark even more price-target cuts down the line. 

Options traders, meanwhile, have remained bullish on Snap stock. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), SNAP sports a 50-day call/put volume ratio of 3.23, which sits higher than 98% of readings from the past year. In other words, long calls have rarely been more popular. 

The stock has shed 78% this year, thanks in part two two separate post earnings bear gaps, suffered in May and July, respectively. The 50-day moving average kept a lid on the stock’s last breakout attempt, and could be a level to watch as the equity tries to rally once more. 

Image and article originally from Read the original article here.

By admin