Soon after Thursday's opening bell rang at the New York Stock Exchange, the stock began trading at more than $24 a share - almost 50 percent higher than its IPO price, CNBC reported.
The California-based company raised $US3.4 billion in the IPO, with net proceeds of about $US2.3 billion.
In exchange for a guaranteed block, the big investors may agree not to dump the stock - though Snap's filing says it may waive the lockup requirement. The Snap team pitched the company's stocks and gave clarifications regarding the spreading concerns. After all, Snap's shareholders will still retain one lever of control: "Investors can vote with their feet", Feldman says.
Shares in Snapchat parent Snap - which debuted on the New York Stock Exchange Thursday - delivered a huge payday to the company's two biggest outside investors. It's not uncommon for the price of shares in an IPO to rise slightly from the company's initial estimate. That has investors wondering whether the company will end up more like Twitter, with its troubles attracting users and declining stock price, or Facebook, with soaring user numbers and stock price.
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). That left the company with a market cap north of $28 billion. Snap said in its regulatory filing last month it took in $404 million in revenue in 2016, but lost $515 million.
Despite a almost 7-fold increase in revenue, the Los Angeles-based company's net loss jumped 38 percent a year ago. Plus, user growth stagnated in the final quarter of a year ago. It's also the first to go public among a class of companies, including Uber, Airbnb and Pinterest, that have been valued at more than $10 billion while still privately held. Meanwhile, Snap's chairman Michael Lynton planned to sell nearly 55,000 shares in the offering, bringing in more than $930,000.
After adding 36 million daily active users during the first half of a year ago, Snapchat picked up just 15 million in the second half. And much like Google and Facebook, it's controlled by co-creators Spiegel and Bobby Murphy.
Snap Inc. shares are reportedly expected to start trading around 11am EST on Thursday morning.