Can Snap fall even more as lockups expire?

Since going public, Snap Inc. has faced increasing competition from Facebook Inc., a $2 billion-plus loss in its first earnings report and a sliding stock price. Now, the Snapchat parent company faces yet another challenge, and historical trends show investors have cause for concern.

Close to a billion shares could hit the market soon, as Snap SNAP, -1.36% early investors and employees are allowed to sell their stock thanks to lockup expirations. The release of new shares following an initial public offering typically pressures prices, but especially so for unprofitable, young, venture-backed companies that see many more shares released than in the actual IPO—all of which describes Snap.

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