Snapchat sell-off as staff get chance to dump stocks

STAFF and investors in the owner of Snapchat dumped their shares last night as fears grew the photo-app firm was being crushed by Facebook-owned rival Instagram.

The New York-listed firm Snap sunk more than 4.5pc in early trading to $13.19, recovering to $13.67 over a volatile day

Monday marked the start of a period that will allow early investors, employees and other insiders to sell their shares for the first time since Snap’s £2.6bn public offering in March – the thirdlargest for a US tech company. It is facing major pressure from rival Instagram, which has cloned many of its features and is expanding its user base at a much faster rate thanks in part to Facebook’s firepower.

After going public at $17 per share in March, Snap briefly enjoyed a high of $27.09 but has since had a rough ride on the markets.

The California-based company posted a £1.7bn loss in its first public results in May and has struggled to convince Wall Street it can turn a profit from advertising.

Investors were further alarmed when it reported 166m daily users, a figure that was below analyst expectations for that month.

Instagram said in June it had more than 250m daily users.

However, despite the share plunge, analysts were optimistic about Snap’s chances of a turnaround.