Snapchat Parent Stock Surges in Market Debut
The company, led by CEO Evan Spiegel, has the largest U.S. IPO since Alibaba went public in 2014, which could give the slow market for technology IPOs a boost.
The stock of Snap Inc., the parent company of messaging app Snapchat, rose early in its stock market debut on Thursday.
Snap shares, trading under the ticker symbol SNAP on the New York Stock Exchange, opened at $24, up 41 percent, and then traded above that price. That gave the company a $33 billion valuation at its open.
Snap had on Wednesday priced its stock at $17, giving the company a valuation just short of $24 billion. That was well above the $14-$16 range initially expected, a sign of strong investor demand for the five-year-old firm.
The Wednesday pricing makes Snap's IPO the largest in the U.S. since Alibaba went public in 2014 and could give the recently slow market for technology IPOs a boost. Snap offered 200 million shares in its IPO.
The blockbuster IPO also signaled a huge payday for the company's co-founders, CEO Evan Spiegel and CTO Bobby Murphy. Both have stock holdings valued at about $5 billion each. Meanwhile, Sony chairman Michael Lynton — who in January announced he will resign his studio job to become Snap's permanent chairman — has about $72 million worth of Snap's stock.
Based in Venice, Calif., Snap is best known for its app offering disappearing messages, but Spiegel describes the business as a camera company that offers a content platform and sells camera-enabled glasses called Spectacles.
Snap lost nearly $515 million in 2016 on revenue of $404 million. In December it reached 161 million daily active users around the world, up 46 percent from the previous year.