Why Snap, Tech Data, and Ambarella Slumped Today
Friday was a positive day for the stock market, as the major benchmarks built on gains achieved over the last several trading sessions. Investors seemed to shrug off news that job growth slowed in August, as employers added 156,000 jobs for the month, lower than the 180,000-190,000 expected by economists. The market was relatively quiet as negotiations continued regarding the North American Free Trade Agreement. Yet some companies faced their own specific obstacles, and Snap Inc. (NYSE: SNAP), Tech Data Corporation (NASDAQ: TECD), and Ambarella, Inc. (NASDAQ: AMBA) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.
Shares of Snap fell 1.7% following negative analyst comments that reignited concerns over increasing competition from Facebook, Inc. (NASDAQ: FB). The company behind the popular Snapchat app was the subject of a bearish take issued late Wednesday by Wedbush Securities analyst Michael Pachter. In a note to investors, Pachter pointed to Facebook's capacity "to deploy significant development resources efficiently." Facebook's Instagram app has relentlessly copied its competitor's most popular features, now offering Stories, live video, and disappearing messages, all of which originated on Snapchat. Snap investors have long been worried about the competitive threat and significant resources of the company's larger rival.
Additionally, the analyst stated, "We believe that Facebook's introduction of Instagram Stories is intended to insulate itself from losing users to Snapchat, and the rapid growth in the Instagram Stories user base reflects that this strategy is working."
Source: Fool.com