When Snap, the parent company of social messaging service Snapchat, made its IPO on March 2, it was already trading higher than its initial value of $17 per share. It closed the day at $24.48 per share. It sold 200 million shares to raise $3.4 billion, and made its founders billionaires.

As of March 3 at 8:58 am. PST, Snap was trading at $27.95, and it looked at the time like its value was going to increase even further. However, Snap’s stock closed Monday, March 6, at $23.77, showing that its bubble may have burst already.

What happens next?

Some experts think Snap’s IPO is “too big to fail,” and that although other big tech companies like Uber and Airbnb are not planning to go public, the reaction to Snap’s IPO may encourage smaller tech companies to make their own initial public offerings.

“If you’re anywhere within the neighborhood of going public, you might as well go and catch some of the money that people are throwing around,” Rob Enderle, principal analyst at tech analysis firm Enderle Group told The Washington Post.

Certainly, some of Snap’s IPO success can be attributed to the Dow’s record high and the hunger of tech investors for something to invest in. 2016 was the slowest year for tech IPOs since 2008, and last year, tech mergers and acquisitions and buybacks outpaced IPOs by a ratio of 38 to 1, according to Thomson Reuters data.

However, there is concern about Snap’s IPO. In a first-of-its-kind offering, the publicly offered shares gave no voting rights to stockholders. In fact, voting power is limited to its co-founders (about 87 percent) and a couple of venture capital companies (13 percent) that got in on the ground floor with Snap.

“The bottom line is, it’s having your cake and eating it too,” Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, told MarketWatch. “If you are going to sell to the public, you have to take the public’s vote. Having it both ways creates a problem for the public and it’s problematic for you. It creates a massive accountability issue. It might come to really haunt you.”

Another issue facing Snap is the fact that it has yet to make a profit. In fact, it posted a net loss of $514.6 million in 2016 and has warned that it may never be able to achieve or maintain profitability.

Snap is “significantly overvalued given the likely scale of its long-term opportunity and the risks associated with executing against that opportunity,” wrote Brian Weiser, an analyst at Pivotal Research Group in a note to investors. He even rated the stock a “sell” with a $10 price target.

Snap’s growth has already slowed significantly around the world. “Snapchat’s slowing user growth ultimately caps its long-term revenue opportunity,” said Nomura analyst Anthony DiClemente, who sees a 6 percent downside to the stock.

Although Snap has a promising and innovative advertising structure, “so far it is still mostly unproven and difficult to quantify its ultimate scale,” wrote Weiser. Certainly, Snap has yet to be able to compete with social media giants like Google, Facebook, and Twitter for advertising dollars.

Snap is investing in hardware to supplement its app. Last year it started selling Snapchat Spectacles, sunglasses that have a small camera installed and can upload video to the app. It also launched a payments feature called Snapcash.

Ethan Kurzweil, partner at Bessemer Venture Partners, told MarketWatch that investors are buying into future innovations like these. “You’re counting on them to come up with something that will reignite their growth,” he said.

Ultimately, it comes down to whether investors will continue to be interested in a company whose only offering is ephemeral and that offers no promise of future profits.

“Snap is relatively young and it’s yet to generate profits. The typical IPO tech investor will say that’s fine and it doesn’t matter,” said James Gellert, chief executive of the analysis firm Rapid Ratings. But will long-term investors have the same feelings? That remains to be seen.

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