Snap Inc Priced Its IPO Way Above the Estimated Range

SNAP, +48.00% the parent company of messaging app Snapchat, surged more than 40% on Thursday, but the Global X Social Media ETF SOCL, -1.30% fell 1.5%. Despite the higher than expected pricing, the company lost $500 million a year ago as it tries to grab a foothold with its advertising.

Lock-up periods help companies moderate stock volatility by preventing company insiders from selling their shares within an allotted time.

Snap’s initial success on the public market-and the jump in Spiegel and Murphy’s fortunes-is likely a welcome sign for the 16 billionaires in the United States whose fortunes are tied to highly valued unicorn startups, including Uber, Airbnb, Palantir and Stripe. Shen noted that Snap’s price-to-revenue ratio was much higher than those of a lot of other big tech companies at the time of their IPOs.

The market euphoria was over a money-losing message service, Snapchat. Given the interest, Snap could have priced the shares at Dollars 19 each, the person said, but executives wanted to ensure that shares would make a decent gain in their debut.

The much-anticipated video recording “Spectacles” from Snapchat are also available online for users in the USA at $129.99.

“Investors can’t have the same level of confidence that they would in other companies”, said Alan Brett, head of corporate governance ratings research at MSCI Inc.in London.

In the lead up to going public, Snap was forced to contend with some criticism over the pace of user growth. They then reportedly rose to $24.67 per share.

That’s far, far, and away above the price Snap set last night, $17 per share, when the company raised $3.4 billion – a 44 percent increase. Alternatively, the excitement around the debut indicates there is desire, at least by some investors, to take a bet on Snap’s 26-year-old CEO Evan Spiegel. Turn the camera to selfie mode, and you get a bunch of filters to overlay on your face.

Snapchat’s success has forced larger tech services like Facebook, Twitter (TWTR, Tech30) and Instagram to clone its features, with mixed success.