For the first time since it went public, Snap Inc. shares went back down to $17, which is the price of the company's stock for its initial public offering in March.

The share price plunge represents a 42 percent fall from the Snapchat owner's all-time high stock price of $29.44 in March, and highlights the waning confidence that investors have on the company.

Snap Shares Drop To IPO Level

On June 15, the price of Snap shares fell by 4.9 percent to $17, which was the stock price set when the company launched on the New York Stock Exchange.

The price climbed to $29.44 over the next few days after its IPO. Snap shares have since declined, but have never fallen below its IPO price.

Falling below its IPO price would have been a bad sign for Snap, but that is not uncommon for Silicon Valley companies whose stocks were hyped to investors. For example, Alibaba's stocks fell below their IPO price after 233 days since its debut, while Facebook's shares went under their IPO price just on its second day.

Facebook, however, was able to bounce back, with its stocks now up almost 300 percent compared to its IPO price. Snap is hoping that it could pull off a similar recovery, but it will definitely be an uphill climb.

Snap Stock Was Expected To Fall

Before Snap launched its IPO, there were already certain signs that investors should stay away from buying the company's shares. One of these signs was the performance of other mega IPOs in the tech industry, with most stocks falling after the company's first fiscal year since going public.

Snap shares surged during its first day of trading, as many analysts expected. However, there were also high expectations that Snap stock prices would eventually fall, due to the aggressive competition in the industry and a slow growth in its user base.

This is exactly what has happened for Snap since it launched its IPO. In its first quarterly earnings report released in May, it reported slowing growth in both revenues and number of users. For last year, Snap also reported a loss of $515 million.

The stock price plunge meant that investors who purchased Snap shares during its IPO now have no profit to show for their initial investment. Meanwhile, those who bought Snap stocks during its peak price have now lost 42 percent on their investment.

Evan Spiegel, the CEO of Snap, also lost net worth of about $46 million, bringing his total down to $3.9 billion. Any fluctuation in Snap's shares has a huge effect on Spiegel, as his fortune is mostly tied to his holdings in the company that he cofounded. Snap, meanwhile, now only carries a market value of $20.2 billion, losing $8.1 billion since its IPO.

Will Snap Recover?

For investors, the burning question is whether Snap can recover from its freefall. That will not be an easy task, especially as the competition has increased from other tech companies such as Facebook, which has replicated several popular features of Snapchat into its apps and services.

Lower stock prices will also make it harder for Snap to attract top talent, as compensation packages are mostly tied to the company's shares.

Snap will need to find solutions to its problems soon, as it does not want its stock prices to fall further below IPO levels.

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