Snap pops 13% after NBC reveals IPO investment

Yet some investors question the company’s long-term health and effect on the IPO market.

Snap, which owns mobile app Snapchat that allows users to capture videos and pictures that self-destruct after a few seconds, was co-founded by Evan Spiegel and Bobby Murphy. The messaging app, launched in 2011, has gained a massive and loyal following among teens and young adults. In its initial public offering, Snap revealed user growth was up 48% year-over-year, slower than previous years.

A plush toy of Snapchat’s ghost mascot sits on a trader’s desk at the New York Stock Exchange.

By midday, the shares had inched up slightly to more than $25. It then closed at $27.09 on Friday after another day of gains. Twitter had 2,000. Facebook, 3,200. Shares of Twitter opened on the NYSE in 2013 at $26, but today are worth slightly more than half that.

Snap, which will start trading under the symbol “SNAP”, will sell 200 million shares for $17 apiece on Thursday, giving it a valuation of nearly $24 billion-with executives like CEO Evan Spiegel, cofounder Bobby Murphy, and early investors selling 55 million of their own shares and walking home with $935 million in proceeds.

Both previous IPOs had their bulls and bears – just as Snap does – and each had their reasons. “Grow through acquisitions. Grow through new technology”. That’s exciting, but might mean a lot more people need to practice their flying skills first. Grow through partnering. Grow.

“They must be a different company a year from now”, added Kagan.

Of course, not everyone is trying to get in on the SNAP action.

Snap’s Snapchat app is best known for disappearing messages and quirky facial filters for jazzing up selfies.

Snapchat aims to derive most of its revenue from advertising where it will compete against Google, Facebook and Twitter.

Social media giant Facebook has even tried taking a page from Snapchat’s playbook.

It reported a rise of just over 3% in the final quarter of past year when it had been in double figures earlier in 2017.

As noted by Statista, Snap’s early stage investors will earn themselves a very large profit since they managed to buy into the private company at very low valuations.