Snap Inc to raise $3.4b ahead of NYSE debut

Traders at the New York Stock during the Snap Inc. float. And though Snap has yet to make a profit – the company lost $515 million previous year, many analysts say one of the biggest worries investors have about the deal is the fear of missing out.

Venture capital firms have been waiting for an encouraging signal-worried that they paid too much for their stakes in so-called unicorn companies (privately held startups valued at over $1 billion), according to Bloomberg’s Sarah McBride. Now, Sacca is congratulating Murphy and everyone at Snap for building a billion-dollar company.

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 overwhelming surge of buyers and high stock prices was surprising to many.

In a filing with the Securities and Exchange Commission, Snap admits it “may never achieve or maintain profitability”. But it generally refers to the period from when a company files a registration with the SEC until the SEC declares the registration statement effective.

IPO stands for initial public offering and it refers to the first time that the stock of a company is offered to the public.

Other investors and top execs in the company will also make a fortune following the official listing of the company at the New York Stock Exchange.

In the lead up to going public, Snap was forced to contend with some criticism over the pace of user growth.

Investors bought the shares despite their having no voting power – an unprecedented feature for an IPO at odds with rising concerns about corporate governance over the past few years from fund managers looking to gain influence over executives.

Once the lock-up period comes to an end the majority of trading restrictions are lifted.

In the opening minutes of trading its price hit $US24.48 a share, a jump of about 40 percent.

“There is a strong chance that the initial IPO rally will continue into a follow-up rally, which will spur even more short demand”, Ihor Dusaniwsky, head of research at S3, wrote in a note.