Snapchat firm share price soars on debut
- Author: Zachary Reyes Mar 04, 2017,
Mar 04, 2017, 15:57
The shares opened trading today at around $23.50 to $24.50, giving the company an overall valuation of $24 billion.
Though it is traditional for stock to rise in value in its first day of trading, the increase suggests early investor excitement around Snapchat, which re-branded as a Snap Inc and as a camera company in late 2016. In its initial public offering, Snap revealed user growth was up 48% year-over-year, slower than previous years. The Wall Street Journal takes a closer look at the company's "elusive" (and apparently reticent) founder.
They will list on Thursday on the New York Stock Exchange. Their remaining stakes in the company are worth $5.2 billion. The launch could encourage debuts by other so-called unicorns, tech start-ups with private valuations of US$1 billion or more.
Two Boston-area venture capital firms are getting a boost from Snap's soaring stock price after the Snapchat maker had its initial public offering on Thursday. That would add $392 million to each of their net worths, based on Snap's closing price, potentially boosting it to almost $5.6 billion.
Although Snap is going public at a much earlier stage in its development than Twitter or Facebook, the five-year-old company is valuing itself at almost 60-times revenue, more than double the 27-times revenue mark Facebook fetched in its IPO. Snapchat is best known for disappearing messages.
Facebook Inc., by comparison, was valued at $104 billion at the time of its IPO, while Twitter Inc.'s value at IPO stood at just over $14 billion.
Snapchat started 2017 with 158 million daily active users, most of whom are people in their teens, 20s and early 30s.
The president of Saint Francis High School, Simon Chiu wrote in a letter to families of students saying in part, "The school's investment in Snap has matured and given us a significant boost as we continue our work towards realising the bold vision and goals".
"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".