$20bn flotation of Snap sees 'a nosebleed's worth of demand' for shares
- Author: Zachary Reyes Mar 04, 2017,
Mar 04, 2017, 17:50
At that price, Snap has a market value of about $24 billion.
Some Silicon Valley observers say the IPO should encourage other growing tech companies to go public, even if they're not yet showing a profit. At that level, Snap's introduction on the New York Stock Exchange is the most lucrative since China-based e-commerce firm Alibaba Group Holding Ltd., parlayed its IPO into $25 billion, the largest in history, in 2014.
Morgan Stanley, Goldman, Sachs & Co., J.P. Morgan, Deutsche Bank Securities, Barclays, Credit Suisse and Allen & Company LLC are acting as book-running managers for the offering.
Snap is the parent company of popular photo sharing app Snapchat which is beloved by teenagers and people under 30 for applying bunny faces and vomiting rainbows onto selfies. But the questions is - how will Snap survive against Facebook, a company which seems intent on grabbing users by emulating its best ideas? That left the company with a market cap north of $28 billion.
In the opening minutes of trading its price hit $US24.48 a share, a jump of about 40 percent. Facebook at its IPO had 845 million monthly active users and 483 million daily active users. It will be the largest IPO of a USA -based company since the May 2012 debut of Facebook (FB), which raised $16 billion.
Launched in 2011, Snapchat now has 158 million daily users.
It is the most valuable American technology company to go public since Facebook almost five years ago.
Protesters demonstrated outside Snap Inc.'s Venice headquarters on Thursday, claiming that the company is turning colorful local retail space into tiresome offices.
Snap's IPO also is the first notable tech IPO of 2017.
"In a regulatory filing ahead of the IPO, the company said roughly one-quarter of its planned float of 200 million shares would be subject to a lockup of one year before that chunk could be sold".
Snap's debut on the New York Stock Exchange starts a new era for the young Los Angeles-based company, which at first had to fight to be taken seriously.