What happened

Shares of Snap Inc. (NYSE:SNAP) climbed 14.9% in June, according to data provided by S&P Global Market Intelligence, after Citron Research published a positive note about the company and initiated coverage at the very end of May.

Shares continued to climb through mid-June after S3 Partners, a company that analyzes short-seller trends, said that millions of shares that were being held for short sellers were being recalled.

Yellow graph chart on blue background.

Image source: Getty Images.

So what

Snap's shares first started ticking up at the very end of May after Citron set a price target for Snap at $17. Citron said in its investor note that negative news surrounding Snap's app, Snapchat, has caused short sellers to increase their position. But Citron added that "Snap shorts have overstayed their welcome."

Citron cited Snap's growth in ad impressions, the popularity of its Snapchat app among younger users, and its efforts to fix the app's redesign flop as reasons why the shares could turn around. Though Citron mentioned several reasons why it's bullish on Snap, my fellow Motley Fool Evan Niu highlighted a few inaccuracies in the report here.

Additionally, S3 Partners issued a report saying that over 5 million Snap shares were recalled (meaning that owners of the shares sold them and they were no longer available for lending to short sellers). The temporary shortage of available Snap shares for short sellers helped lead to Snap's price ticking up toward the beginning of the month.

Now what

Snap's shares began to lose some of their steam toward the end of the month after Cowen's John Blackledge lowered his previous price target from $10 to $9, and reiterated his sell rating. Additionally, Needham & Company cut its revenue estimate for Snap's second quarter by 15%, and by 5% for the full fiscal year.

Chaotic reactions to any news, both negative and positive, continue to plague Snap's stock. Even social media comments from celebrities have sent the company's stock reeling. 

Snap will report is second-quarter results at the beginning of August. Management said on last quarter's earnings call that the company's second-quarter revenue growth rate will "decelerate substantially from Q1 levels..." All of which means that Snap's shareholders may not be able to hold on to June's gains for very long.