Purchasing shares of Snap Inc. (SNAP) is a straightforward process that can be done by any investor with a brokerage account. Snap is the parent company of popular social media app Snapchat and trades on the New York Stock Exchange. Here’s a step-by-step guide to buying Snap stock.
Step 1: Choose a Brokerage
The first step is to open an investment account with a brokerage firm if you don’t already have one. Some top brokerages for stock trading include:
- Fidelity
- Charles Schwab
- E*TRADE
- TD Ameritrade
- Vanguard
- Robinhood
You’ll need to fill out an application with your personal information and funding details. Most brokers allow you to open an account online in a few minutes. Consider factors like account minimums, trading fees, investment choices, and platform features when choosing the best broker for your needs.
Step 2: Deposit Funds
Once your brokerage account is open, you’ll need to fund it to begin trading. Most firms allow you to transfer money electronically from your bank. You can also send a check, wire money, or deposit directly from a paycheck in some cases. The minimum amount required to open an account tends to range from $500 to $2,000. Make sure you have enough to cover the cost of Snap shares plus any commissions.
Step 3: Place a Trade
Now comes the fun part – actually buying Snap stock! Here are the steps to place a trade:
- Enter “SNAP” as the stock symbol.
- Choose the number of shares you want to purchase.
- Select a market or limit order type.
- Review and submit the order.
That’s all there is to it! Most online brokers make trading very simple with intuitive platforms and mobile apps. You’ll see the shares in your account after the trade executes.
Step 4: Monitor Your Investment
Now that you’ve bought Snap stock, it’s time to monitor your investment. Add SNAP to your watchlist to keep an eye on the share price. Check news and reports about the company to stay informed. Snap releases quarterly earnings results that can impact the stock’s value. You may want to buy more shares or sell some over time. Pay attention to your position to decide if and when to make changes.
Important Notes on Buying Snap Stock
Here are some key points to keep in mind as you invest in Snap stock:
- Share Price – Snap stock trades at around $10 per share, so you don’t need thousands to invest. You can buy fractional shares with some brokers too.
- Account Type – Snap can be held in a variety of taxable and tax-deferred accounts like IRAs and 401(k)s.
- Trading Costs – Online brokers charge from $0 to $10 per trade. Consider fees when choosing where to open your account.
- Snap News – Keep up with Snap’s earnings, product developments, user growth, and other events that may impact share price.
Advantages & Disadvantages of Buying Snap Stock
Here’s a quick rundown of some pros and cons to consider before buying Snap stock:
| Advantages | Disadvantages |
|---|---|
| Exposure to fast-growing social media sector | Still losing money and unprofitable |
| Popular brand and platform with young users | Intense competition from larger rivals |
| Innovates with new features and services | Stock price has been volatile |
| Reasonable valuation compared to peers | Might never deliver long-term profits |
Snap Inc. Company Overview
Here are some key facts and background about Snap Inc. to provide context on the business:
- Founded in 2011 and headquartered in Santa Monica, California.
- Went public in 2017 at $17 per share under the ticker SNAP.
- Owns and operates the Snapchat mobile app and Snapchat Spectacles wearable camera.
- Main product Snapchat has over 280 million daily active users.
- Revenue comes from advertising and branded content within the app.
- Has not yet achieved consistent profitability as a public company.
- Hosted first investor day in February 2021 to outline long-term growth plans.
- Major competitors include Facebook, Instagram, and Twitter.
Understanding Snap’s business model and competitive environment will help you evaluate the potential upside and risks. The stock’s future price movements will depend on the company’s user growth, revenue performance, product innovation, and profitability progress going forward.
How Much Should You Invest in Snap Stock?
Deciding how much to invest in Snap stock depends on your personal financial situation and risk tolerance. Here are some tips on position sizing:
- Start small – investing $100 or $500 can help you learn without too much risk.
- Consider Snap a percentage (1-5%) of your overall portfolio.
- Diversify with other stocks and asset classes to manage risk.
- Invest an amount you’re comfortable with losing in a volatile stock.
- Avoid investing money you may need in the near future.
Younger investors with time on their side can likely take more risk. Older investors nearing retirement may want to size their position conservatively. Reassess and rebalance your allocation to Snap periodically as your goals change over time.
Should I Buy Snap Stock Now?
The decision of whether to buy Snap stock now depends on your individual analysis of Snap’s business prospects and stock valuation. Here are some factors to consider:
- Growth potential – Snapchat still has room to expand its user base globally and continues reaching new demographics like older users.
- New products – Snap is rolling out new premium services like Snapchat+ subscriptions and could monetize future hardware like AR glasses.
- Competition – Rivals like TikTok present significant challenges to Snapchat’s dominance among young users.
- Profitability – Snap has outlined plans to scale revenue faster than costs, but it’s still losing money.
- Valuation – Snap stock trades at around 5x sales compared to over 3x for Facebook and 12x for Pinterest.
Investors optimistic about Snap’s future growth prospects and competitive position in social media may want to consider building a position. Others concerned about challenges to growth, profitability, and valuation may prefer to wait or seek other opportunities. Do thorough research before deciding if Snap is a good investment today.
How to Buy Snap Stock Step-by-Step
For investors who have decided they want to buy Snap stock, here is a step-by-step walkthrough of how to purchase shares:
- Open a brokerage account – Sign up with an online broker that allows stock trades. Fund your account.
- Analyze Snap – Research the company and determine if and how much you want to invest.
- Enter SNAP as symbol – Type the stock ticker SNAP into the brokerage’s trade ticket or order entry form.
- Select order type – Choose market order to buy at current market prices or limit order to set a maximum price.
- Input share amount – Enter the number of shares you want to buy or dollar amount you wish to trade.
- Review details – Verify the symbol, order type, share amount, and fees.
- Submit order – Finalize and submit your market buy order for Snap stock.
It’s that easy! Once the order is filled, you’ll see the shares in your brokerage account and can monitor their performance. You may want to place sell orders later to lock in any profits or cut losses. Be sure to track your tax obligations on any investment gains or losses in a taxable account.
Best Brokers for Buying Snap Stock
The broker you choose to buy Snap stock through can significantly impact your overall investing experience. Here are a few of the top brokers for purchasing Snap shares:
- Fidelity – Fidelity offers $0 trades, extensive research, and excellent trading platforms and mobile apps.
- Charles Schwab – A full-service broker with solid tools, education, and support that charges $0 commissions.
- E*TRADE – Known for ease of use, E*TRADE charges no trading fees and provides quality research.
- TD Ameritrade – Fees are $0 and TD Ameritrade offers hundreds of Snapchat branches for in-person support.
- Robinhood – This popular app-based broker pioneered $0 stock trades. Great for beginners.
Compare features like costs, investment choices, tools, and account minimums to select the best broker for your needs. Many leading firms offer demo accounts you can try for free before committing.
Risks & Challenges of Buying Snap Stock
While Snap stock offers potential upside, investors should also consider these key risks:
- User growth – If Snapchat stops adding users or loses existing ones, revenue and profits will suffer.
- Competition – Facebook and Instagram copy Snapchat’s features and TikTok is growing extremely quickly.
- Profitability – Snap has struggled to contain costs and achieve sustainably positive earnings.
- Management – Founder Evan Spiegel has full control and his decisions may not always align with shareholders.
- Regulation – Changes in data privacy laws or app store policies could impact Snap’s business model.
Understanding these risks allows you to size your position appropriately and invest in Snap stock as part of a diversified portfolio. The company faces challenges but also has significant opportunities if it can continue executing well.
Snap Stock Price History
Here is a brief overview of some notable events in Snap’s stock price history since its IPO:
- March 2017 – Went public at $17 per share.
- March 2018 – Fell to all-time low of $4.99 after struggling to add users.
- February 2020 – Hit high of $19.75 before plunging along with the broader market.
- September 2020 – Surpassed its IPO price for the first time, reaching $26.
- February 2021 – Jumped 25% to over $60 on positive user and revenue growth.
- October 2022 – Trades around $10 after sell-off fueled by recession fears.
Snap stock has experienced extreme volatility since going public. Shares trade 74% below their high close to $20 but also well above the low around $5. Future price swings will continue being driven by Snapchat usage, financial results, and market sentiment shifting between optimism and pessimism.
Conclusion
Purchasing Snap shares takes just a few quick steps through an online brokerage. While investing in any individual stock carries risks, Snap offers exposure to the high-upside social media sector. The company faces substantial challenges in growing users and achieving consistent profitability but retains strong brand recognition among young demographics. Do thorough due diligence and size your position based on risk tolerance. Monitor Snap closely and be ready to adjust your investment plan over time based on new developments.