What Snap's Lead IPO Underwriter Got Wrong About the Company (by Its Own Admission)

What Snap's Lead IPO Underwriter Got Wrong About the Company (by Its Own Admission)

Morgan Stanley was the lead underwriter on Snap's (NYSE: SNAP) initial public offering. The investment bank made $25.7 million in fees for underwriting 60 million Snap shares at its IPO. Then, 25 days later (after the quiet period ended), the research arm of the bank gave Snap shares an overweight rating and a $28 price target.

Earlier this week, Morgan Stanley's analysts changed their tune. Lead analyst Brian Nowak told investors, "We have been wrong about SNAP's ability to innovate and improve its ad product this year," downgrading the stock to equal-weight and its price target to just $16 -- notably below Snap's $17 IPO price.

Here's exactly where the analysts went wrong.

Continue reading

Source: Fool.com