Snap's stock whipsawed this month, with Wall Street analysts torn on whether the shares are worth more or less than the $17 IPO price it received in March. And it's about to face its biggest challenge in a while, as its lockup period ends.
Among finance types, one explanation of Snap's unrest has been the timing of the massive public offering.
Paul Meeks, chief investment officer and portfolio manager at Sloy Dahl & Holst, told CNBC this month that Snap should have waited to go public since its business model was too immature and susceptible to copying by Facebook's Instagram app.
But "Shark Tank's" Mark Cuban praised Snap for going public early, noting "when you're already large, it's hard to accelerate your growth."
Unfortunately, that's exactly the problem Snap encountered, adding fewer-than-expected users in the first quarter.
Indeed, for more than two years, major technology investors and CEOs have warned this would happen, chanting the mantra, "Start-ups are waiting too long to IPO." Saleforce's Marc Benioff said "entrepreneurs are making a huge mistake in waiting too long to go public."
Fred Wilson of Union Square Ventures was sounding the alarm back in 2015. "The big problem is, companies can get much better valuations in the private markets than they can in the public markets. Companies will come out and go public, and the stock will trade below where they did their last round of financing in the private market," he warned. "I think companies should be going public earlier in their life cycle so the broader public can be shareholders. I think it's not good for society for all the gains in these game-changing companies to be held between a very, very small shareholders."
So what should Snap have done differently? Go public later? Go public earlier? That's up for debate.
Bullpen Capital's Duncan Davidson is of the school of thought that Snap should have gone public "a few years ago." But, he said, bringing back the successful smaller IPO requires a whole ecosystem — one that buyers today don't have access to.