Snapchat continues to surge a day after its blockbuster IPO
- Author: Carolyn Briggs Mar 03, 2017,
Mar 03, 2017, 18:00
The fact that Snap's stock popped leads some to suspect that more technology IPOs could be in store as other unicorns - privately held companies worth $1 billion or more - decide to try their luck in public markets.
Demand for the shares was almost 12 times oversubscribed - and this from a company that not only has never made a profit (and lost $500m last year).
Snap started trading at $17 per share shortly before 11.20 a.m. eastern USA time (1620GMT) and quickly rose with high demand.
The price is higher than Snap had originally predicted, indicating that the company is seeing great demand for its initial public offering.
After months of planning, Snap - the company behind Snapchat - has officially debuted on the New York Stock Exchange, and things are apparently going well.
Snap Inc. -the parent of social network Snapchat - debuted on the New York Stock Exchange on Thursday in the most anticipated tech IPO in years.
Snap had on Wednesday priced its stock at $17, giving the company a valuation just short of $24 billion.
The company's growth has been largely driven by younger users, who spend over 30 minutes on it per day, according to the company's filing. "You're paying 32 times sales for slow user growth, and all indications from the data I've looked at [show] that slow user growth has continued into the first quarter of 2017".
Snap, which rebranded itself as a camera company a year ago, debuted video-camera sunglasses called "Spectacles" as its first product in November.
Snap's valuation is far below that of Facebook's $397 billion. Evan Spiegel and Robert Murphy, Snap cofounders, will retail control over all matters at the company - class A stock being sold in the IPO comes with no voting rights.
Founded in early 2011 by three friends who first met in a Stanford University dorm, Snapchat was valued at $4.25 million when it received its first venture capital. He even met Snapchat co-founders Evan Spiegel and Bobby Murphy. Thursday also marked Snap Inc.'s first day as a publicly traded company.