My reply was: “I had read a few weeks back that was coming although I didn’t know it was today. I’m a firm believer that most known variables are usually (not always) priced into a stock & as such, reflected in the charts.

Just about anyone that follows the market closely is aware of the post-IPO smack-down on SNAP as well as the share unlock. Although there is never any guarantees with any trade, I’d imagine that most, if not all & quite possible then some (i.e.- an over-reaction) to the affect that the share unlock would have on SNAP was already priced in on that 62% plunge. If I’m wrong, barring a large gap down beyond my stop, the amount that I risked on the trade is less than 1/3rd of what I stand to profit if my take on the stock is correct.

Thanks for sharing though. As I said, I knew there the share lock period was scheduled to end soon but if anything, the fact the stock is trading up sharply today in spite of that only helps to strengthen the case that the selling was overdone & a short-squeeze may be close at hand.”

After the update this morning, I recalled a similar over-hyped, beloved social media stock IPO that, just like SNAP in an almost uncanny similarity, also plunged 61% from it’s post IPO highs, mainly on fears of huge selling once the IPO lock-up period was over. As the chart of FB below shows, after that 61% drop, on the very day of the largest lock-up expiration, the stock rallied as much as 11% and NEVER looked back from there, gaining over 900% since then.

I should be clear that I don’t believe that SNAP will be the next Facebook nor am I looking to tuck this stock away as it is merely a swing trade idea that will likely only last weeks or a few months at most. I’m simply pointing out the fact that my comments yesterday could very well prove to be accurate with the same 61% (61.68%) drop in SNAP a result of similar fears that resulted in the 61% post IPO drop in FB… fears of selling after the lock-up period.

Here’s an article on the FB share lock-up expiration back on Nov 14, 2012 along with an excerpt: https://www.cnbc.com/id/49824482

“Facebook’s lock-up expirations have weighed on the stock, as traders feared a flood of shares from employees, former employees, and investors would send it tumbling.

But with the biggest lock-up expiration on Facebook shares Wednesday, the opposite happened: Facebook’s stock soared as much as 11 percent Wednesday morning as 804 million shares hit the market.”