The stock price of Snapchat’s parent company, Snap (snap), soared days after it went public in March, but has been plummeting since Monday—sending 26-year-old CEO Evan Spiegel’s fortune down with it.
Spiegel owns more than 90 million shares of Snap, which was trading at an all-time low on Wednesday of $15.23—dipping below its IPO price of $17 for the first time this week. The result: The value of Spiegel’s personal holdings fell by nearly $3 billion, slashing the value of his net worth, which was as much as $6.4 billion the day following Snap’s IPO.
The young CEO’s stock today is worth $3.6 billion. Spiegel owns enough shares that a $5 dollar drop in Snap’s stock price will drive his net worth down by more than $1 billion. The company’s shares are down 10% this week alone.
On Tuesday, Snapchat’s lead underwriter Morgan Stanley downgraded Snap from overweight to equal weight and cut its price target to $16 from $28. The news had a major impact on Snap’s stock price, which fell 1.5% on Wednesday through midday.
Other analysts are taking a softer stance: Credit Suisse cut their target price from $30 to $25, warning that Snap insiders will have the opportunity to sell their shares later in July. However, Credit Suisse analyst Stephen Ju is still bullish on the company—his target price is 40% above where the stock is currently trading.
The problems for Snap have been adding up of late. The company’s first quarter revenue and user growth fell short of Wall Street expectations. And Facebook has developed a similar platform to Snapchat on Facebook and Instagram, cutting into Snapchat’s user numbers.
Spiegel isn’t the only one hurting from Snap’s bearish turn. Other big owners of the stock include major venture capitalists like LightSpeed Venture Partners and Benchmark Capital Partners.