Fees to borrow Snap (NYSE: SNAP) shares short have "cratered", according to S3 Partners.

"From trading at 64% fee on August 1st, stock borrow costs were down to 4.5% yesterday and 2.00% today," S3's Ihor Dusaniwsky said.

This is related to new shares that continue to hit the market after the recent lock-up expiration. Demand has also been relatively stable, Dusaniwsky added.

Snap will be reporting its second quarter results after the bell tomorrow, August 10th.

Shares are down 21% from their March IPO price, but appear to have stabilized over the past few sessions. A recent Business Insider article that Google had tabled a $30 billion takeover offer last year may be giving longs some solace and shorts a reason to cover.