After months of planning, Snap — the company behind Snapchat — has officially debuted on the New York Stock Exchange, and things are apparently going well.
The Washington Post reports that Snap — which now uses ticker symbol SNAP — began trading at $24 a share beating expectations prior to the debut and giving the company a valuation of $28 billion. The stock is currently trading at nearly $26/share, boosting Snaps market cap to just shy of $30 billion. Barring some drastic change of fortune in the final hours of trading, that’s a good first day.
Snap previously priced its initial public offering between $14 to $16 per share, for a total price of about $22 billion. The company then increased the price to $17 a share. Thursday’s debut is 41% higher than that figure.
However, the company noted in a filing with the Securities and Exchange Commission that it could increase its valuation range if it sees strong demand for the stock.
The higher stock debut, analysts tell the Post, is a sign that the company’s IPO is in great demand. Despite the popularity, analysts warn that the company is young and has yet to generate profits.
Snap, which brings in the bulk of its revenue from advertisements in filters and promoted stories on Snapchat, could use the funds from an IPO for acquisitions of additional virtual-reality companies.
In December, the company jumped into the augmented reality arena with the $40 million purchase of Israeli start-up Cimagine Media.
Snap execs were heavily criticized in 2013, when they reportedly rebuffed Facebook’s $3 billion offer, and one from Google rumored to be worth $4 billion. Today’s IPO values the company at more than seven times that price.
by Ashlee Kieler via Consumerist
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