TLDR
- Snap (SNAP) stock rose about 6% on Friday to near $6.26, even as the communication services sector fell 1%.
- Activist investor Blue Duck Capital urged the board to sell a 20% stake in Specs for $1 billion, saying it could lift the stock to $12-$14.
- Snap is bringing its $2,195 Specs glasses to enterprise users through partnerships with NVIDIA, Salesforce and Amazon Web Services.
- The stock trades above all four major moving averages, with resistance at $6.26 and support at $5.59.
- Snap reports earnings Nov. 4, with analysts expecting 16 cents per share on $1.73 billion in revenue.
Snap Inc. (SNAP) stock gained about 6% on Friday, trading near $6.26 at the time of publication. The stock closed at $5.86 the day before.
The move stood out on a day when communication services was the weakest of the 11 S&P 500 sectors, falling 1%. The Nasdaq rose 0.47% and the S&P 500 added 0.57%.
Volume was light, though. About 13.8 million shares changed hands, roughly 70% below the average daily volume of 45.4 million.
Activist Investor Wants Specs Funded Separately
Blue Duck Capital sent an open letter to Snap’s board on Tuesday. The firm wants Snap to raise outside money for its Specs augmented reality glasses business.
Its plan would sell a 20% stake in Specs for $1 billion. That would value the unit at $5 billion and leave Snap with 80% ownership.
Blue Duck says the cash could cover two years of Specs development, which costs about $500 million a year. It believes the move could more than double Snap’s stock price to between $12 and $14.
The firm named Space Exploration Technologies as a possible strategic investor. It pointed to potential AI and Starlink connectivity links.
Blue Duck also estimates Snap’s core ad and subscription business could produce nearly $2 billion in adjusted EBITDA by 2027. The letter’s price targets remain speculative.
Specs Heads Into the Workplace
In September, Snap announced partnerships with NVIDIA, Salesforce and Amazon, through Amazon Web Services. The goal is to bring the $2,195 Specs glasses into enterprise use.
Snap plans to use NVIDIA’s XR AI technology to build AI agents. These agents would process live camera and microphone inputs.
The idea is to help workers understand their surroundings and get real-time guidance.
Chart Check: Trend, Support and Resistance
Snap trades above its 20-day SMA of $5.63, its 50-day SMA of $5.48 and its 100-day SMA of $5.25. It also sits above the 200-day SMA of $5.59. That points to improving short- and medium-term momentum.
One caution remains. The 50-day SMA is still below the 200-day SMA, so the longer-term trend has not fully turned bullish. The MACD is above its signal line, which suggests buying momentum is building. Resistance sits at $6.26 and support at $5.59, near the 200-day SMA.
What to watch: a close above $6.26 could extend the rally, while a drop below $5.59 would put the 200-day SMA at risk and weaken the recovery case.
Analysts and Insiders
Wall Street holds a consensus Hold rating on Snap. Of the 30 analysts covering it, one rates it Strong Buy, nine Buy, 24 Hold and two Sell, according to MarketBeat data.
Price targets range from $5.25 to $16. The average is $7.32 by one count and $7.65 by another.
Recent moves include Mizuho raising its target to $6 and Truist cutting its target to $7. RBC kept its Sector Perform rating and $8 target.
Insiders sold 2,445,926 shares worth about $13.4 million over the past 90 days. That includes CTO Robert Murphy’s sale of 2 million shares at $5.55 on Aug. 5.
Snap’s Benzinga Edge Momentum score is 55.35, which is neutral. Snap reports earnings on Nov. 4, and analysts expect 16 cents per share against a loss of 6 cents a year earlier.
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