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Snap just had its biggest trading day since the day it went public — and now it’s worth even less

More than 162 million Snap shares traded hands today.

A stuffed and smiling ghost — the symbol for Snapchat — sits on a railing with the New York Stock Exchange in the background. Peter Kafka / Recode

More than 162 million Snap shares traded hands today. That’s the second-highest trading day by volume in company history, behind only March 2, the first day people could buy and sell the stock on the public markets.

But while a lot of stock moved today, it wasn’t a great result — Snap’s shares closed today down almost 15 percent.

Snap has announced a ton of news in the past 24 hours, including that Chinese investment company Tencent has taken a 12 percent stake in Snap. (Those shares were apparently purchased earlier this month.) That’s probably why there was so much trading today.

But there may be another reason. Snap struggles to communicate with investors, which means every bit of news that comes out tends to elicit an extreme reaction from Wall Street. Snap doesn’t provide revenue guidance, for example, forcing analysts to make their best guess on setting expectations. Even after they lowered those expectations, Snap still failed to meet them.

Tencent’s investment could have also been explained more thoroughly. Instead, it was essentially a footnote in Snap’s 10-Q filing with the Securities and Exchange Commission. Tencent doesn’t get any voting privileges along with its investment, which makes Tencent’s incentive tougher to understand. Why did Tencent invest? And what does it mean for Snap? CEO Evan Spiegel, who recently admitted he needs to do a better job communicating with investors, could have communicated that Tuesday on the company’s earnings call. Instead, it was never even mentioned.

The result: Following a third straight quarter of bad earnings, Snap was one of the most active pre-market stocks with over 14 million shares traded before the bell this morning. Stocks tend to trade heavily (and unpredictably) when investors are continually surprised.

Snap employees themselves were able to sell shares for the first time this August, but trading volume on that day was much lower than today. The company’s 90-day average trading volume is around 26 million shares per day.

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