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Confident Snap brushes off concerns on second day of IPO roadshow


Snap Inc, owner of popular messaging app Snapchat, fended off investor skepticism on the second day of its IPO roadshow on Tuesday, betting on the charisma of CEO Evan Spiegel, 26, whom it introduced as a "once in a generation founder."Snap is targeting a valuation of between $19.5 billion and $22.3 billion from listing on the New York Stock Exchange in two weeks. It cut its initial target of $20 billion-$25 billion last week following negative investor feedback. In a room of more than 400 investors on the 36th floor of New York's Mandarin Oriental Hotel, Spiegel brushed aside concerns of slowing user growth and stressed Snap's potential to change "the way people live and communicate," according to sources who asked not to be identified because the meeting was closed to the press. Many investors remained unconvinced by Snap's claim that it is more valuable than Facebook Inc (FB. O) based on revenue at the time of its IPO in 2012. Still, they acknowledged that Snap has built momentum as this year's biggest technology IPO and the darling of millennials."They could have been in their underwear up there and no one would have cared," said one investor who attended the roadshow on Tuesday.

In the Q&A with management that took up the entire session, not one attendee asked about the company's first-of-its kind share structure that offers IPO investors no voting rights. Investors were wary that being too critical might prompt the company to limit their allocation in the offering, an investor said. Spiegel and co-founder Bobby Murphy will have the right to 10 votes for every share, and existing investors such as venture capital backers will get one vote for each share. Investors seeking clear answers to concerns around metrics, particularly the company's long-touted new user growth, were disappointed. New user growth slowed in the second half of 2016, and just this week Facebook's WhatsApp introduced a disappearing photo-messaging service similar to Snapchat's. Last year, Facebook introduced disappearing videos to its Instagram platform that resemble Snapchat's.

Spiegel said the company's growth is "lumpy," due to new launches that have varying degrees of success. In a recent update of its IPO registration document, the company also pointed to technical issues facing Android devices that have hindered new user growth outside the United States. Chief Strategy Officer Imran Khan asked investors to gauge how much users engaged by looking at Snap's cost of revenue. Traditionally, investors focus on metrics such as daily active users or minutes spent on the app.

Snap's cost of revenue is primarily driven by how much the company has to pay to partners such as Alphabet Inc's

Dow breaks 12 day record streak ahead of Trump speech; retail down


U.S. stocks slipped on Tuesday and the Dow snapped a 12-day streak of record closes as investors awaited President Donald Trump's address to Congress, while a disappointing outlook from Target (TGT. N) dragged down retailers. All three major indexes posted gains, however, for the month of February, with the S&P 500 up 3.7 percent. Stocks have risen sharply in the wake of the Nov. 8 election, bolstered by Trump's promises of tax reform, infrastructure spending and reduced regulations, and investors are looking for more specifics on how he may achieve those promises. Ahead of his address, due at 9:00 p.m. EST (0200 GMT), Trump on Monday met U.S. state governors at the White House and said he sees "big" infrastructure spending and that he is seeking a "historic" increase in military spending of more than 9 percent. While a lack of concrete details from Trump could disappoint some investors, other investors may just be looking for any sign that Trump's pro-growth plans are on track, strategists said."There's a significant amount of optimism and euphoria in this market. I don't expect there to be a lot of details, but I'm also not confident that the maket is going to disappointed by not having details. This market loves to trade on hope," said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. "The key thing we're focused on is how is he going to pay for these tax cuts."

The Dow Jones Industrial Average . DJI was down 25.2 points, or 0.12 percent, to 20,812.24, the S&P 500 . SPX had lost 6.11 points, or 0.26 percent, to 2,363.64 and the Nasdaq Composite . IXIC had dropped 36.46 points, or 0.62 percent, to 5,825.44. For the month, the Dow rose 4.8 percent and the Nasdaq gained 3.8 percent. The S&P is up 10.5 percent since the Nov. 8 election.

Target (TGT. N) slumped 12.2 percent in its biggest one-day percentage drop since 2008 after the retailer's full-year profit forecast missed estimates and the company said it would take a $1 billion hit to its operating profit. The S&P retail index . SPXRT was down 0.8 percent and the discretionary index . SPLRCD was down 0.7 percent, the biggest drag on the S&P 500. Also weighing on sentiment was data that showed U.S. economic growth slowed in the fourth quarter. Charles Schwab (SCHW. N) fell 3.2 percent after the company said it would cut its ETF trade and online equity fees, following similar cuts by Fidelity Investments. TD Ameritrade (AMTD. O) dropped 10.4 percent.

FCA reveals federal and state officials have probes on diesel DETROIT Fiat Chrysler Automobiles NV is being investigated by the U.S. Securities and Exchange Commission, the U.S. Justice Department and several state attorneys general for alleged excess diesel emissions by some of its vehicles, the automaker revealed in a filing with the SEC on Tuesday.

GM CEO 'exploring opportunities' for Opel with Peugeot WASHINGTON General Motors Chief Executive Mary Barra said on Tuesday the Detroit automaker is exploring opportunities with French automaker PSA Group , but declined to discuss a potential sale of its money-losing European Opel unit.

Exclusive: Mexico considered forcing Slim to separate America Movil fixed unit - sources MEXICO CITY Mexico's telecoms regulator has discussed forcing billionaire Carlos Slim to legally separate his fixed-line company Telmex from his wireless business, three people familiar with the matter said.