We might see short squeeze for Snap's stocks at the end of the summer

Insiders who got a crack at the Snap IPO at the offer price of $17 per share won't sell the stock when they're finally allowed to later this summer.

"Stifel comes out and says the risks to Snap are overstated, and they are relishing the opportunity in this."

"There's a subtle moment … in this call." "The implication was, don't fear the lockup expiration as much. A lot of it's done by insiders. I think the next thing that happens is the insiders come out and say, 'We're not selling, not at these prices. If anything, were buyers.' That gets the short squeeze going."

Two lockup periods expire in the coming weeks — the 150-day on July 31 and the 180-day on Aug 31.Many insiders are restricted from selling stock for an agreed upon lockup period after the initial public offering. Often lockup expirations lead to a drop in a recent IPO's share price.

Snap shares bounced more than 4 percent after the Stifel call. The stock hit a record low of $15.21 on Wednesday, well below its initial public offering price of $17 per share.

Source: Bloomberg Pro Terminal

Trader Bozhidar Arabadzhiev

Read more:

• And for all the bounty hunters: Iran offers $80m for the head of Donald Trump
• US service member and 2 US Defense Dept contractors killed in Kenya attack
• Iranian Quds leader Qasem Soleimani has been killed – how are markets reacting
• A calm end of an otherwise loud 2019
• Old but Gold – Top 5 posts of Varchev Finance