Investors eager to snap up Snap shares after successful IPO

James Cordwell, a research analyst with Atlantic Equities, compared Snap's soaring stock and lofty valuation to Twitter after its IPO in 2013. "Even the original naysayers and detractors from the deal have pretty much softened their negativity".

Snap Inc, the maker of Snapchat, will begin selling its shares for $17 a piece when it starts trading on the New York Stock Exchange Thursday morning, according to Reuters. And though Snap has yet to make a profit - the company lost $515 million previous year, many analysts say one of the biggest worries investors have about the deal is the fear of missing out. Most analysts expect Snap to report around $1 billion in sales this year. Its popularity is a given, but its ability to generate revenue is highly questionable (it is yet to turn a profit). In 2015, it reported losses of $372.9 million; a year later it documented a loss of $514.6 million.

Does Snapchat need to go beyond young users to succeed? James Gellert, chief executive of the analysis firm Rapid Ratings, expects Snap will crackle with a post-IPO pop, thanks to tech-focused investors hungry to get their hands on something new. "Everyone has heard of it". The company said last month it's valued at $19.5 billion to $22.2 billion.

The premises of Facebook and Twitter's IPOs were very similar to Snap's, but have had two very different outcomes. But while it's been widely known that General Catalyst would stand to benefit, we just learned about the other local VC firm that has a stake in Snap: Accomplice. "However, we are not contemplating any material acquisitions at this time".

Snapchat, which is especially popular with teenagers, allows users to send images and messages which then vanish. It initially developed a reputation as a service for sending salacious pictures, but has since moved far beyond that.

The market research firm had previously projected that USA users in that age group would make up 4.2 percent of Snapchat's total users. Facebook is now valued at $395 billion.

  • Carolyn Briggs


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