Stock Market Today, June 16: Snap Falls After Launch of $2,195 AR Glasses
Snap (NYSE:SNAP), a social-focused technology platform, closed Tuesday at $5.16, down 9.72%. The stock dropped during the regular session as investors reacted to the launch of $2,195 SPECS augmented reality glasses and CEO Evan Spiegel’s defense of heavy AR spending against activist pressure. Investors are also watching whether consumer demand will justify the investment. Trading volume reached 92.2 million shares, about 84% above its three-month average of 50.2 million shares. Snap IPO'd in 2017 and has fallen 79% since going public.
How the markets moved today
The S&P 500 fell 0.55% to finish Tuesday’s session at 7,513, while the Nasdaq Composite declined 1.15% to close at 26,376. Within the internet content & information space, industry peers moved mixed as Meta Platforms closed at $600.21, up 1.13%, while Pinterest ended at $21.18, down 0.68%, highlighting divergent sentiment across social-media platforms.
What this means for investors
Augmented reality glasses continue to be one of the most hotly debated tech products. Will they, or won’t they, become a staple of our lives in the future? However, most market participants today decided that, whatever the outcome of augmented reality glasses becomes, Snap’s SPECS cost way too much, which prompted its shares to sell off today.
Priced at $2,195, SPECS cost roughly three times as much as Meta’s Ray Ban smart glasses and were called “heavier-looking” than traditional Ray Ban and Oakley glasses by market commentators. I support businesses trying new things, but a company going head-to-head with Meta and Alphabet (while still not at breakeven profitability due to massive stock-based compensation) isn’t something I’m interested in.
Down 79% since its IPO in 2017, Snap may be a classic example of an incredible product that just isn’t a great stock, at least yet.
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Josh Kohn-Lindquist has positions in Alphabet and Pinterest. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, and Pinterest. The Motley Fool has a disclosure policy.
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