Snap (SNAP) stock rallied on Tuesday alongside reports that activist investor Irenic Capital Management has built a stake in the social media and camera company. According to these reports, Irenic Capital Management has pushed for Snap to make operational changes, including the spin-off or closure of its smart glass business Spectacles, which has already had $3.5 billion pumped into it by Snap.
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The latest insider report claims that Irenic Capital Management has built a 2.5% stake in Snap. The investor reportedly sent a letter to Snap’s management, which outlined changes the company could take to boost its share price. Irenic Capital Management allegedly believes that these actions could push SNAP stock to $26 per share.
Also included in Irenic Capital Management’s letter to Snap were calls to change its headcount. The letter reportedly claimed that Snap overhired, like many other tech companies, and argued that it hasn’t reduced its headcount to save operating costs. On the positive side, Irenic Capital Management praised the company’s social media platform and said it believes there is room for additional growth.
Snap Stock Movement Today
Snap stock jumped 12.44% on Tuesday but was still down 43.99% year-to-date. The stock has also fallen 54.98% over the past 12 months.
With today’s news came heavy trading of Snap stock, as more than 72 million shares changed hands. To put that in perspective, the company’s three-month average daily trading volume is about 39.36 million shares.
Is Snap Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Snap is Hold, based on three Buy, 20 Hold, and two Sell ratings over the past three months. With that comes an average SNAP stock price target of $7.90, representing a potential 72.11% upside for the shares.
