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Don't Pay Up for a Piece of Snap

The Snapchat parent soared in its debut, but investors should wait for a wider margin of safety on this 'camera company.'

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Ali Mogharabi: Snap became a public company today at an IPO price of $17, above the $14-$16 range it was seeking, and the stock started trading at $24. In our view, Snap shares are overvalued, and we would wait for a pullback and a margin of safety before investing in this very high uncertainty name.

Founded in 2011, Snap, which refers to itself as a camera company, is a popular player in the social network space. It helps users communicate with one another mostly by using pictures and videos, or snaps, on its Snapchat mobile app.

Ali Mogharabi does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.