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Another big chunk of Snapchat's share price just disappeared; stock closes 9.8% lower

Snap, the parent company of social media platform Snapchat, saw its stock tumble 9.8 percent Tuesday after a massive rally.

The stock fell as much as 13.2 percent earlier in the session.

The company, which went public on Thursday, received a very warm welcome into the stock market, skyrocketing 44 percent in its first day of trading and another 10 percent in its second.

The initial excitement began to fade Monday, however, after several analysts initiated coverage of the stock with a "sell" rating. Many questioned the company's growth potential. Analysts at Needham initiated coverage of the social media firm's stock with an "underperform" rating, noting the company's total addressable market is 80 percent smaller than Facebook.

"Prospect Theory would label SNAP a 'lottery-like' stock," they said in a note Monday.

The stock dropped more than 10 percent Monday and closed below its opening trade price from Thursday.

Snap's first three days of trading

Source: FactSet

—CNBC's Berkeley Lovelace Jr. contributed to this report.

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