Snap Inc. and Blue Apron Holdings Inc. have faced difficult discrepancies in stock valuation during their transition from private to public valuations. What were the two most anticipated IPOs have now become case examples of inconsistencies between private and public funding? They now serve as a reminder that stock value is not the only important aspect of running a successful business, indicating a bleak short-term future and possibly a poor long-term future as well if the operations remain the same.

The source of the overpricing these two companies face is twofold. Investors ever urgent drive to have a part in the next big hit, essentially a bet on future innovation helps drive up the value of unprofitable companies facing fierce competition. What often occurs is that investors then begin to invest in anything with potential, diversifying their risk portfolio while maximizing future profits. This influx of wealth and promise leads to the second source of overpricing, in which the companies themselves receive feedback that what they are doing is enough, resulting in a lack of growth and foresight.

When these two scenarios occur, public market investors show reluctance to reward rich market values without proof of financial health and future growth. Just because private investors were willing to invest in a company does not mean that their intent will translate in public commercial appeal. And this is how Snap and Blue Apron find themselves trading below their initial public offering price.

Now as previously mentioned, there is more to running a successful company than market value, and despite Snap’s and Blue Apron’s market value is below the expected public offering price, this does not mean there is no hope for the company. However, market value is an estimation that communicates the status of a company to potential investors, and so having a negative valuation could produce a positive feedback loop that continues a decrease in a company’s stock price. The negative sentiment can erode customer relationships, employee morale and the ability to raise more money, which results in making a turnaround significantly more difficult. This is why it is so important that companies do not overshoot what public investors will be willing to pay based on private funding. Otherwise, it is not just your stock that will take a beating.

Regarding the specifics of stock prices for Snap as an example, Snap’s stock prices fell from $17-a-share IPO to $15.44 on Tuesday. With such a major decline, Snap’s market capitalization is valued at about $18.2 billion, which is a major contract to the anticipated high-end valuation target of $40 billion. Other companies including Snap may need to give investors an exit opportunity, which will stand as a true test of whether the valuations are fair.

Considering the current lack of discernable financial health and future growth plans, Snap and Blue Apron are expected to continue their decline in valuation at the IPO stage over the next two years. These expectations are based on the fact that these companies do not live up to the worth dictated by private investments, and are therefore likely to continue suffering for it.

Snap’s situation has been influenced more by external pressures, as the IPO has faced numerous criticisms regarding its growth due to competition from Facebook Inc.’s Instagram app. Competitors often gain an upper effect when a company fails to deliver, as the customers and investors immediately switch over to what is considered to be better performing based on reputation. Because of this, by June, Snap was the most-shorted new U.S. technology stock of the year.