Shares of Snap, owner of the Snapchat messaging app, had their busiest trading day in two and a half months in a volatile session on Monday, as early investors could sell their shares for the first time since its March market debut.
The stock pared losses to close down 1pc at $13.67, after falling as much as 5.1pc and hitting a fresh record low following the expiration of a trading lockup.
Trading volume was 2.9 times the company’s 10-day moving average with more than 48.8m shares changing hands after a trading restriction was lifted for early shareholders.
Employees will have to wait two more weeks before selling their shares in Snap whose $3.4bn (£2.6bn) IPO was the third-largest for a US technology company.
The shares swung between positive and negative territory Monday, hitting a high of $13.98 and a low of $13.10. It ended the day about 54pc below its March 3 intraday peak as investors have fled on concerns about its growth prospects.
Many investors positioned themselves ahead of the expiration, at least partly explaining Snap’s 23pc drop for the month of July, according to traders and analysts.
“If people are placing negative bets or were trying to liquidate, in both cases, you’d want to have done it before today,” said Andrew Frankel, co-president of Stuart Frankel Co in New York. “It’s down certainly because the lockup has expired. It’s not down 5pc because it’s not new news.”