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Why you shouldn't write off Snap just yet

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New technology firms that go public can behave like a drunk driver behind the wheel of a car but should not be written off and could become big businesses, Polar Capital Fund Manager Ben Rogoff told CNBC on Tuesday.

Rogoff referenced the rough start to trading that both Facebook and Google had when they started trading but said that they had become major players now. The fund manager called Facebook "one of the best companies on earth".

The comments were made in relation to Snap and is initial public offering. Rogoff said it was hard to know whether it would become as big as Facebook or struggle like Twitter has done.

"These companies that come along and change the world often look like drunks at the wheel of a car… and then what happens is they reach a certain size where they can start pulling levers on monetization and ad-load and all of a sudden they look like very real businesses," Rogoff told CNBC.

The parent company behind the popular messaging app Snapchat has witnessed somewhat of a rollercoaster ride in terms of its share price since its IPO on March 1. However, the stock has surged by almost 20 percent in the past week.

Mixed market consensus

According to FactSet, 62 percent of analysts still have a hold or sell on the stock. But on Monday, several of Snapchat's underwriters offered some much-needed reprieve to the firm by handing it buy ratings and, as a result, its shares soared by more than 5 percent.

Goldman Sachs reported on Monday that despite Snap's higher risk profile, the reward for investment was plain to see.

"With Snap's large, valuable, and highly engaged user base generating ad inventory and the monetization path in mobile now well worn, we believe the potential for outperformance as the company continues to innovate against the growing mobile opportunity outweighs those early stage risk," Goldman Analyst Heath Terry said in a note to investors, giving Snap a price target of $27.

Audience size 'critical'

The question many investors had been left asking themselves was whether Snap's stock could become the kind of runaway success like Facebook or whether its promising potential will wane in a fashion not dissimilar to Twitter.

Rogoff argued a key measure in the decision-making process should boil down to audience volume.

"The size of the audience is critical to the valuation of (a company) because those large networks change behaviour… The challenge is we just cannot know whether or not (Snap) is going to grow into another Facebook in terms of the size of its audience," Rogoff added.

Disclosure: CNBC parent NBCUniversal is an investor in Snap.

Correction: This article has been altered to accurately reflect what Ben Rogoff, a fund manager at Polar Capital, told CNBC.