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There was a ton of buzz leading up to Snapchat’s IPO at the beginning of March. So far, its stock (NYSE: SNAP) has performed admirably. After debuting $24.48 per share, the price surged 44% on its first day to a $25 billion market capitalization.Before the IPO, investors were chomping at the bit for the next big tech IPO. Many experts expected it to be the hottest IPO of the year, and even though that doesn’t seem like it will be the case, Snapchat's stock is showing similar habits to other tech companies:
In the past, we’ve discussed the important role Snapchat plays in the digital marketing sphere and where we expect to see it in the future. However, some individuals are pessimistic about the photo-sharing app’s longevity in the marketplace.Snapchat’s PlateauAccording to a recent blog post from Marketing Land, Snapchat’s bubble might be on the verge of bursting. Three days after the company’s IPO, the stock price fell 12%, which may have been fueled by speculation about growth rates.During the fourth quarter of 2016, Snapchat’s user base grew by 5 million users. While this might look like an impressive increase, it’s a sizable decline from the second quarter last year when Snapchat saw 21 million people join its user base.So when we ask if Snapchat has plateaued, the answer is no more than Facebook, Twitter, and LinkedIn. There’s a finite number of people who can join any social network and a slowdown in inevitable. Even though Snapchat faced increased competition from “story” features delivered from Instagram and Facebook, its users base is incredibly active and loyal.Advertisers are already finding significant success on Snapchat, but it doesn’t come without its challenges. Many advertisers complain about a lack of transparency, and cross-platform advertisements are difficult to muster since ads need to be developed for a vertical screen. With this in mind, Snapchat should continue to grow… just at a slower clip.