How Snap handles its first few quarters will either make it a star or get it 'Twittered'

Snap's biggest challenge as it hit the market Thursday will be convincing investors of its profitability, investment expert Paul Meeks told CNBC.

Trading in the social media giant's highly anticipated initial public offering began Thursday at $24 a share, more than 40 percent above the price it set Wednesday.

The IPO has raised questions among investors about whether Snap will end up a tech leader like Facebook, or troubled like Twitter. Snap has seen a temporary decline in daily active users and is currently not profitable.

"There will be a tipping point for Snapchat at some point," Meeks, chief investment officer at Sloy, Dahl & Holst, told "Squawk Box." "I just can't see it yet."

Snap priced its public offering at $17 a share on Wednesday, to be valued at $24 billion. To succeed in the short term, Meeks said the company needs to prove two things.

"One is a re-acceleration in daily active users, and two is an increase in the average revenue per user, particularly abroad, where the APRUs are always less than they are in the United States," Meeks said, using an acronym meaning average revenue per user.

But Meeks said the company will eventually reach a point that will determine its fair valuation, for better or for worse.

"The company, at some point, will reach a crisis where it's really going to be a make or break for the business, and if they handle it well, it becomes a star," Meeks said. "If they don't, unfortunately, it becomes 'Twittered.'"

Meeks said Snap needs to broaden the scope of its business to offer users a wider range of products.

"The problem is, at least at this point, [that] it's a one-product company," Meeks said. "And also, they do dominate, in a traffic demographic, the younger folks. But at some point, at least in the United States, that might be saturated, and they're going to have to come up with another gig."

Meeks said that he would not be buying Snap's IPO.

"I actually think if you were trading-oriented, you may want to be selling into the open and see how this business model matures over time," he said.

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