Snap slides after Evan Spiegel sold shares and Citigroup downgraded the company
- Snap fell as much as almost 6% Tuesday, hit by a one-two punch.
- CEO Evan Spiegel sold $50 million worth of shares on February 14th.
- Citigroup downgraded the stock, pointing to declining app reviews.
Snap fell as much as 6% Tuesday after Citigroup downgraded the stock to sell from neutral and lowered its price target to $14 a share.
While Citi acknowledged that the redesign could have a positive long-term impact on the photo-sharing company, it cited an app review from App Annie showing that, since November, Snap's apps reviews have declined. Five star ratings went from 2.1% to 1.3% in that span, and one star ratings went from 28% to 86%.
"While the recent redesign of [Snap's] flagship app could produce positive long-term benefits, [there is a] significant jump in negative app reviews since the redesign was pushed out a few weeks, which could result in a decline in users and user engagement, and could negatively impact financial results," analysts Mark May and Hao Yan wrote.
Tuesday's selling may also be related to CEO Evan Spiegel selling $50 million worth of shares, or about 1% of his holdings, last week. The share-sale was his first since Snap went public a year ago.
Spiegel still maintains about a 10% stake, and has a total fortune of $4.5 billion.
