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Billionaire investor David Tepper, whose views on markets and stocks are closely watched by other money managers, said on Wednesday US time that he bought shares of Snap in its initial public offering, sold some, and would buy again if the price dropped.
Tepper, who runs Appaloosa Management, said about the Snapchat owner in an interview on CNBC: "We bought it on the new deal. I like the company. My youngest daughter loves it. Anyone between 12 and 25 loves it."
Snap soars at open
Snap's shares shot higher amid strong demand after the company debuted on the New York Stock Exchange.
But Tepper said he already sold some shares as the price marched higher. "I don't own every share we bought."
The highly anticipated $US3.4 billion ($4.51 billion) offering was the biggest US technology IPO since Alibaba Group Holding Inc in 2014.
The owner of the messaging app popular with millennials priced its offering at $US17 a share last week, higher than the expected range despite concerns about the loss-making company's slowing user growth. It closed the first day of trading with a 44 per cent gain at $US24.48.
Shares have since retreated, however, closing on Tuesday at $US21.40 after analysts gave the company a lukewarm reception.
There has been considerable speculation about which investors in Snap's IPO would hold shares for the long term. The company said last week it expected investors buying up to a quarter of the shares in the IPO to agree not to sell them for a year.
Tepper said he told Snap's bankers that he would not keep holding the shares at any price.
"If it gets into high 20s, I'm going to have to sell it. I can't love stocks at every price."
He said that if the price moved above $US31 a share, for example, he would have sold all of his position.
Yet at a lower price, he said he might be tempted to buy Snap shares again.
"If it goes back down and I think it has the same prospects, I will buy more," he said.
He called it a "valuation thing" and other investors appeared to respond to his fundamental confidence in the company. Shares were lower in pre-market trading on Wednesday, but Tepper's comments gave them a small boost.
Reuters