What Happened?
Shares of social network Snapchat (NYSE: SNAP) jumped 8.5% in the morning session after social media stocks rose ahead of the Supreme Court's decision on the potential ban of TikTok in the United States. On January 19, 2025, a decision is expected to confirm if the social media platform owned by ByteDance would have to sell its TikTok assets, a move which could result in less competition for other players, including Snap.
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What The Market Is Telling Us
Snap’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 5.3% on the news that JMP Securities analysts reaffirmed the stock's Buy rating, with a price target of $16, which implied a potential 35% upside. The analysts think the demand for SNAP's new ad formats should boost advertising revenue in 2025.
Snap is up 15.3% since the beginning of the year, but at $12.96 per share, it is still trading 25.8% below its 52-week high of $17.45 from February 2024. Investors who bought $1,000 worth of Snap’s shares 5 years ago would now be looking at an investment worth $744.11.
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