Michael Nagle | Bloomberg | Getty Images
Snap Inc. signage is displayed on screens outside of the Morgan Stanley building in New York, on Thursday, Feb. 16, 2017.
The holding company, which owns social media phenomenon Snapchat, will debut on the New York Stock Exchange Thursday but investors have bought shares with no voting power.
Stephen Isaacs, Chairman of the Investment Committee at Alvine Capital says the major investment banks behind Snap’s public debut are pushing through an unusual move that takes liberties with investors’ rights.
“Morgan Stanley and Goldman should hang their heads in shame here. I mean not about the valuation but non-voting shares?
“Isn’t that the ultimate example of bubble trouble? So I say we are in a bubble, there is no value and investors should take a lot of risk off the table,” he said Thursday.
Isaacs says the Snap Inc IPO could come to symbolize something bigger than just the deal itself as markets continue to bloat ever higher.
“There are two views; the Warren Buffet view is that he market isn’t that expensive, the American economy is doing well and the long-term investor should always be engaged. And in the end he’s done a pretty good job of managing other people’s money.
“The other view which I’m afraid I agree with is that we are in a cycle, we are at the top of the cycle, valuations show absolutely no value and then Snap comes along,” Isaacs said.
“Sometimes a deal at the top of the market can be something that crystallizes the insanity”, he added.
