Mar 7, 2017 · 5 minutes

At least Snap’s founders got to enjoy the weekend.

After an IPO that had financial reporters scoffing about how much money Snap left on the table by pricing “too low” the company spent Monday reeling, dropping 12%. It’s down again today.

This is not unheard of for a risky tech stock to pop on its opening and then trade down days later. What is less common is that none of the analysts covering the stock rate it a “buy.” Five rate it a sell and two rate it a “hold.”

“Hold” is the most bullish endorsement Wall Street can muster of the first decacorn of the era to go public. “Hold” is the peak of enthusiasm for the first major large tech IPO since Alibaba. In fact, Snap is the third largest tech IPO in fifteen years. And yet, no one on Wall Street can recommend people buy it. Not a one!

Sure Google and Facebook both had Wall Street haters early on, but plenty more people were articulating the bull case. I am hard pressed to think of a time where a tech company this hot, this anticipated, an IPO this large that was universally viewed as a bad place to put money. In what’s been a crazy, record setting bull market since the election. People were even still slapping buy ratings on Twitter in the early days of Jack Dorsey’s “turn around.”

If Snap is at best a “hold” what is the message the heads of more beleaguered decacorns like Dropbox and Pinterest are hearing? What message does that send to Uber, which has more than double the valuation, and would likely insist on even extreme founder control?

Some industry watchers were quick to point out that if a day one pop doesn’t matter, a day two (and day three) slide shouldn’t matter either.

And, in a sense, those people are right. Any one single stock data point doesn’t tell you much of anything. But I assure you a slide this deep combined with not a single analyst recommending anyone buy the stock has an impact on Snap internally and companies with heady valuations watching it.

And that’s why this week’s stock price does matter: What Snap does with that reality slap in the face will determine whether this becomes the next $50 billion+ Internet giant or another Twitter.

The VCs who have been on the Bill Gurley side of pushing these decacorns into the market have cited founders like Marc Benioff and Mark Zuckerberg who have argued that going public made them accountable and so it made them better CEOs.

Facebook, in particular, was transformed by its IPO and the turmoil and concern about its mobile numbers after it went. This is the downside of the cult of the founder and founder control. No one holds the darlings of Silicon Valley accountable. The press may try, but absent a leak, we don’t see the numbers of private companies so there’s only so much we can do. Boards increasingly can’t or won’t in their mania to appear “founder friendly” at all cost.

The reason founders don’t want to go public is the jarring switch from an investor who owns 20% of your company and still effectively has no control and an investor who owns less than a percent and can make your life miserable.

It’s a bit like hearing white men describe the destabilizing feeling of suddenly having a lack of agency to women and minorities who have always felt that way. That thing you are describing? It’s not having a natural born economic advantage.

With venture backed CEOs who imagine going public it’s similar: That uncomfortable, horrible feeling you are describing? That’s accountability.

No one would have pushed Facebook on mobile the way the markets did. And rather than bitching and whining about how unfair the characterization was (and in some ways those early bearish Facebook reports did exaggerate the concern) Zuckerberg and Facebook rose to the occasion. It galvanized the team to prove the markets wrong, and Zuckerberg used that newly gained public stock to go on a near $20 billion spending spree that is directly responsible for the company’s near $400 billion market cap today.

Many people saw moves like Instagram and WhatsApp and Oculus as wild overspending, because Facebook could. The way Zuckerberg saw it, he had a gun to his head and didn’t have a choice. It was survival. He had to buy his way into mobile and dominate messaging or Facebook was going to be Yahoo in ten years.

For what it’s worth, I wouldn’t own Snapchat stock either. I think there are some very real risks to the business at this price, as I’ve articulated over and over on this site. But Snapchat was wise to break with the recent Silicon Valley decacorn playbook and get out while there was still a “we could be the next Facebook” case to be made. Uber, Dropbox, Pinterest have all missed that window.

It doesn’t matter what happens next with Snap’s stock. It can trade down every day for a month. The company has the currency. The IPO is done. It’s out. And it if responds the way Zuckerberg and Facebook did to the (warranted) skepticism over its future and user growth, it can now aggressively buy its way to the next fad.

Snapchat has already shown a shrewd eye for acquisitions, with Bitmoji or Vergence Labs, which gave them the technology for Spectacles. Up until now these have been smart product and team additions. That’s all Facebook had done up until Instagram too. It was that public currency that changed its acquisition game forever.

It’s not the stock price or even the S1 that told us what kind of company Snap is. It’s what they do now.

If Snap doesn’t take the message from the markets seriously than it will fall behind quickly. Because Zuckerberg hasn’t yet reached his goal of building the first $1 trillion company yet, and he likely still feels that gun pressed against his temple. It not only needs to act as aggressively as Facebook did, it needs to act as aggressively as Facebook still is.