Traders Purchase Large Volume of Call Options on Snap (NYSE:SNAP)

Key Points

• Unusually heavy call buying hit Snap, with traders purchasing 155,528 call options on Tuesday, about 32% above the recent average volume.
• Snap shares fell 10.2% to $5.13 amid very heavy trading, while the company’s latest quarterly results showed EPS of -$0.05, missing expectations even as revenue rose 12.2% year over year.
• Sentiment remains mixed: several analysts recently cut ratings or stayed neutral, and insiders have also been selling shares, including transactions by Ajit Mohan and Rebecca Morrow tied to tax withholding on equity vesting.

Snap Inc. (NYSE:SNAP - Get Free Report) was the recipient of unusually large options trading on Tuesday. Stock investors purchased 155,528 call options on the company. This is an increase of 32% compared to the average volume of 117,731 call options.

Insider Transactions at Snap

In other Snap news, insider Ajit Mohan sold 44,785 shares of the firm's stock in a transaction dated Monday, May 18th. The stock was sold at an average price of $5.60, for a total value of $250,796.00. Following the sale, the insider directly owned 5,057,891 shares of the company's stock, valued at approximately $28,324,189.60. This trade represents a 0.88% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CAO Rebecca Morrow sold 16,729 shares of the firm's stock in a transaction dated Monday, May 18th. The stock was sold at an average price of $5.60, for a total value of $93,682.40. Following the completion of the sale, the chief accounting officer directly owned 512,811 shares in the company, valued at approximately $2,871,741.60. The trade was a 3.16% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold 2,900,631 shares of company stock worth $16,054,989 in the last quarter.

Institutional Investors Weigh In On Snap

A number of institutional investors have recently made changes to their positions in the company. Korea Investment CORP lifted its stake in Snap by 573.6% in the 3rd quarter. Korea Investment CORP now owns 967,544 shares of the company's stock worth $7,460,000 after acquiring an additional 823,900 shares in the last quarter. Contrarius Group Holdings Ltd purchased a new stake in Snap in the 3rd quarter worth about $10,256,000. DNB Asset Management AS lifted its stake in Snap by 433.6% in the 3rd quarter. DNB Asset Management AS now owns 1,042,873 shares of the company's stock worth $8,041,000 after acquiring an additional 847,447 shares in the last quarter. Quantbot Technologies LP lifted its stake in Snap by 54.4% in the 3rd quarter. Quantbot Technologies LP now owns 749,724 shares of the company's stock worth $5,780,000 after acquiring an additional 264,156 shares in the last quarter. Finally, Ausdal Financial Partners Inc. lifted its stake in Snap by 76.3% in the 3rd quarter. Ausdal Financial Partners Inc. now owns 628,109 shares of the company's stock worth $4,843,000 after acquiring an additional 271,893 shares in the last quarter. 47.52% of the stock is currently owned by institutional investors.

Snap Stock Down 10.2%

Snap stock traded down $0.58 during midday trading on Tuesday, hitting $5.13. 101,910,697 shares of the company were exchanged, compared to its average volume of 50,983,758. The company's fifty day moving average price is $5.63 and its 200-day moving average price is $6.14. The company has a market cap of $8.66 billion, a PE ratio of -21.36 and a beta of 1.03. The company has a debt-to-equity ratio of 1.67, a current ratio of 3.53 and a quick ratio of 3.53. Snap has a fifty-two week low of $3.81 and a fifty-two week high of $10.41.

Snap (NYSE:SNAP - Get Free Report) last posted its quarterly earnings data on Wednesday, May 6th. The company reported ($0.05) earnings per share (EPS) for the quarter, missing the consensus estimate of $0.09 by ($0.14). Snap had a negative return on equity of 18.92% and a negative net margin of 6.72%.The business had revenue of $1.53 billion for the quarter, compared to analysts' expectations of $1.53 billion. During the same quarter in the prior year, the firm earned ($0.08) earnings per share. Snap's revenue for the quarter was up 12.2% compared to the same quarter last year. On average, research analysts predict that Snap will post -0.06 EPS for the current fiscal year.

Analyst Upgrades and Downgrades

Several research firms have recently weighed in on SNAP. Freedom Capital lowered Snap from a "strong-buy" rating to a "hold" rating in a research note on Tuesday, May 12th. Tigress Financial began coverage on Snap in a research note on Monday, April 27th. They issued a "buy" rating on the stock. Benchmark began coverage on Snap in a research note on Monday, April 27th. They issued a "buy" rating on the stock. Wall Street Zen lowered Snap from a "buy" rating to a "hold" rating in a research note on Sunday, May 17th. Finally, Citigroup reaffirmed a "neutral" rating on shares of Snap in a research note on Monday, May 18th. One analyst has rated the stock with a Strong Buy rating, ten have issued a Buy rating, twenty-two have assigned a Hold rating and two have issued a Sell rating to the stock. Based on data from MarketBeat.com, the company presently has an average rating of "Hold" and an average target price of $7.91.

Snap Company Profile

Snap Inc is a camera and social media company best known for developing and operating Snapchat, a multimedia messaging application that allows users to send photos, videos and messages that disappear after being viewed. In addition to its core messaging service, Snap offers a suite of augmented reality (AR) tools, including custom Lenses and Filters, that enable users and third-party developers to create interactive and immersive experiences. The company also provides advertising solutions that allow brands to engage audiences through Snap Ads, Sponsored Lenses and Discover content on the platform.

Founded in 2011 by Evan Spiegel and Bobby Murphy, Snap has continually focused on innovation in camera technology and AR.

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