At $17 a share, Snap hopes to raise $3.4 bn in IPO

Mar 03, 2017, 00:18
At $17 a share, Snap hopes to raise $3.4 bn in IPO

Snap, the parent company of messaging app Snapchat and Spectacles smartglasses, made its debut today on the NYSE with a $24 per share, trading more than 40% higher than its original IPO price. So it's only fitting he will come away with the biggest haul from the IPO.

Snap was founded in 2011.

The exact timing of Snap shares trading will be up to the lead underwriters and their specialists will be taking the steps to meticulously match buyers and sellers, wrote IPOboutique.com in an email to clients.

The company has been vague on its plans to lead and monetize image-driven conversations, but has suggested investors put faith in the vision of its cofounder Evan Spiegel, whom it introduced in its investor roadshow as a "once-in-a-generation founder". While it has yet to profit off that popularity, it is growing its revenue, which was $404.5 million in 2016.

"What that number means for the longer term - very little", said Chi-Hua Chien, managing partner at Goodwater Capital who originated the VC firm Accel Partners' investment in Facebook and later invested in Twitter while at another firm.

Early indications pointed to Snap shares opening up at between US$22 and US$24. They could always sell their shares, of course. But Snap's cameo in Twitter's annual report is a sure sign that the Los Angeles startup has officially arrived.

Snap shares are set to start trading on the New York Stock Exchange under the ticker SNAP Thursday. "Everyone is super happy".

Michael Lynton recently stepped down from his role as CEO of Sony Entertainment to become the chairman of Snap.

Lock them up? Find out why a big block of investors will agree not to sell their Snap stock for at least a year at Business Insider. But the fairly steady orders showed the bankers did a decent job.

The sale, of 200 million shares in total, demonstrated a frenzy of demand for the stock and it took nearly two hours from the opening bell being rung for the opening price to emerge.

A Barron's Next primer ponders whether Snap will follow in the footsteps of Facebook (up 250% since its own IPO) or Twitter (not doing quite as well).

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