Why Snap Inc. (SNAP) Crashed Last Week

We recently compiled a list of the These 10 Firms Were Last Week’s Worst Performers. In this article, we are going to take a look at where Snap Inc. (NYSE:SNAP) stands against the other stocks.

Wall Street’s main indices finished firmer on Friday, with all main indices settling in the green territory ahead of President-elect Donald Trump’s return to the White House.

Week-on-week, the Dow eked out a 3.81-percent gain, the S&P rallied 3.79 percent, while the Nasdaq increased by 3.84 percent.

Ten companies from diverse sectors, however, ended Friday weaker, posting notable declines versus the week prior. In this article, let’s look at which firms suffered a bloodbath and the reasons that dragged their performance.

For this week’s list, we only focused on companies with a market capitalization of at least $2 billion and a minimum trading volume of $5 million.

A young adult family using a Camera to record moments of their daily life.

Snap Inc. (NYSE:SNAP)

Snap Inc. (NYSE:SNAP) saw its share prices decline by 12.9 percent week-on-week to $10.86 last Friday versus the $12.47 the week prior as investors sold off positions following news that the Federal Trade Commission (FTC) is set to refer a complaint against the company to the Department of Justice over allegations that Snapchat’s My AI chatbot used an artificial intelligence that “poses risks and harms to young users.”

A representative from Snap (NYSE:SNAP) debunked the claims, saying that its MyAI incorporates “rigorous safety and privacy processes” and that the FTC’s complaint “lacks concrete evidence.”

The FTC said that its probe “uncovered reason to believe Snap (NYSE:SNAP) is violating or is about to violate the law.”

Overall SNAP ranks 7th on our list of last week’s worst performers. While we acknowledge the potential of SNAP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SNAP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.