SNAP POPPED

Snap closed above its IPO price for the first time since June

Snapping up.
Snapping up.
Image: Reuters/Lucas Jackson
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The last time Snap’s stock price was this high, we were all waiting with bated breath for the next Spider-Man movie.

Snap has been a publicly traded company for 237 business days. It’s been 170 days since it closed at over $20 a share, and 148 days since it closed above its $17 IPO price. That means about 63% of the time that it’s been public, the market valued it less than the amount its first investors thought it was worth when it went public.

The company reported its fourth-quarter earnings yesterday, Feb. 6, beating analysts’ expectations on revenue and overall losses. The good news (which is still pretty much bad news, given that Snap is hundreds of millions of dollars away from turning a profit in a quarter) sent the company’s stock skyrocketing in after-hours trading last night. That enthusiasm continued on through today, closing at $20.67.

There were a few other positive indicators for Snap that likely buoyed the stock price today. Snap is rolling out a redesign of Snapchat—first announced in November—which some analysts are linking to an uptick in daily active users on the platform. The company will also be releasing a way for broadcasters to beam live snippets of shows into the app (including a deal with NBC to steam part of the upcoming Winter Olympics), The Wall Street Journal reported (paywall).

But given how far Snap is from turning a profit—its costs and expenses are nearly double its current quarterly revenue—it’s unclear how long this second honeymoon will last. When Snap inevitably reports another big loss next quarter, will investors respond positively again if the loss is just less than what analysts had been expecting? Will they keep pumping money into a company that hasn’t shown it knows how to be a profitable company?

Perhaps it’ll eventually just disappear, like so many of its messages.