Snap Inc.’s (NYSE: SNAP) shares have been down, and by almost any measure should be. It posted terrible earnings. Several high-profile investors, particularly hedge fund operator Dan Loeb, have exited. Insiders can sell now, as the lock-up expires, and some may. However, the stock rallied 10% Monday morning to $13 for no apparent reason.

According to The Street:

JPMorgan analyst Doug Anmuth estimates that up to 782 million shares of Snap could become available for the first time starting on Monday. Of the 782 million shares, about 600 million are likely owned by directors, executive officers and other affiliates, while the remaining 182 million are from employees, according to Anmuth. After that, another 20 million could be up for grabs when the 180-day lockup period expires on Aug. 31.

Snap’s CEO says he won’t sell. The total number of shares available to sell could easily outweigh his decision to hold. As CEO, Evan Spiegel may want to hold investor confidence while he tries to turn the company around. His challenge is that so many on Wall Street think this can’t be done. Long term, financially, he may have made a bad decision.

For the time being, the only chance Snap shares will rally is a buyout. Even analysts who cover the stock have not mentioned a buyer because there isn’t one. It is the “Twitter problem.” While Snap is used by hundreds of millions of people, management has not figured out a way to make money.

Snap, it can easily be argued, should never have come public. All the initial public offering did was injure new buyers of the stock. The 10% rally does not do much for people who bought at $20, $25 or $29. They may be out of the money forever.

Shares were last seen trading at $12.53, in a 52-week range of $11.28 to $29.44. The consensus analyst price target is still up at $19.05.

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