** Snap's shares SNAP.N down 2.4 pct at $16.58 premarket after lead underwriter Morgan Stanley downgrades the stock, a little more than 4 months after its debut

FILE PHOTO - A banner for Snap Inc. hangs on the facade of the New York Stock Exchange (NYSE) on the morning of the company's IPO in New York, U.S., March 2, 2017. REUTERS/Brendan McDermid

** MS cuts to “equal-weight” from “overweight”, slashes PT by $12 to $16; Below median PT of $19.50

** Snapchat’s ad platform not improving/evolving as quickly as expected, and competition from Instagram is rising - MS

** Brokerage also cuts annual revenue estimate for SNAP by 7 pct to $897 mln and daily active user estimate by 2 pct to 182 mln

** MS says advertisers are struggling to create SNAP ads with adequate completion rates, while app download declines have accelerated

** “We have been wrong about SNAP’s ability to innovate and improve its ad product this year” - MS analyst Brian Nowak

** FIS Astec Analytics data shows weighted average borrowing cost to short stock at 64.73 pct, at high end of range

** Borrowing activity rating is at its maximum of 10, indicating shares are scarce and expensive to borrow

** 12 of 36 brokerages rate the stock “buy” or higher, 17 “hold” and 7 “sell” or lower

** On Monday, SNAP closed below its IPO price for first time since its debut in March

** Up to Monday’s close, SNAP has lost about 42 pct from its early highs after its IPO

** SNAP IPO lock-up period set to expire on July 29

** SNAP graphic: (tmsnrt.rs/2nnB1L2)