Snap's IPO may hurt technology stocks in the week ahead, but should help boost the sector over the next three months, according to analysis of past big tech/social media IPOs.
Snap, which made its trading debut on the NYSE on Thursday with a big initial surge, could garner a lot of attention from tech investors, who may sell other holdings to buy up shares of the hot new entry into the sector. After a short period, the whole industry may get a lift as the new IPO raises valuations for the space in the eyes of investors, history shows.
Here's what happened to a major technology ETF, the SPDR Technology (XLK) and the in the week, month and three months following those IPOs, according to Kensho.
After trailing the market in the first week, tech goes on to nearly double the return of the market three months out.
Disclosure: NBCUniversal, parent of CNBC, is a minority investor in Kensho.