Underestimating bear market impact led to bad calls on Snap, with future recovery unlikely.

From Nasdaq: 2024-09-01 06:45:00

In 2022, underestimating the severity of the bear market led to bad bullish calls on stocks like Snap, Inc. which lost more than half its value and kept falling. Despite hopes of beating the market, Snap has since lost approximately 65% of its value, making a comeback unlikely by April 2027.

The mistake stemmed from underestimating the bear market’s impact in April 2022, leading to calls on sinking stocks, further exacerbated by rising volatility. Snap seemed promising with user growth and ad revenue improvements, but the bear market downturn hit hard, leading to further declines.

Looking ahead, it’s unlikely Snap will outperform the market in the next five years due to ongoing net losses and slower revenue growth, compared to industry behemoth Meta Platforms. While Snap’s price looks attractive, its fundamentals and future growth prospects may deter investors from entering the stock market.

Reflecting on missteps with Snap and other stocks, the lesson learned is the unpredictability of market bottoms and the need for caution in severe downturns. Despite Snap’s potential, it has yet to recover fully, making it a speculative investment option for those willing to take the risk.

While considering investing in Snap, it’s essential to weigh the risks and potential returns. The Motley Fool Stock Advisor team has identified 10 promising stocks, excluding Snap, that could potentially yield significant returns in the future. Their proven track record could guide investors towards impactful investment decisions.



Read more at Nasdaq: I Was Wrong About Snap Stock in 2022. Here’s How I See It Now.