Snapchat firm share price soars on debut

Snap Inc. investors need to do a reality check instead of getting carried away by the euphoria generated after the shares of the company listed at a huge premium to the IPO price.

Snap Inc. -the parent of social network Snapchat – debuted on the New York Stock Exchange on Thursday in the most anticipated tech IPO in years.

Snapchat started 2017 with 158 million daily active users, most of whom are people in their teens, 20s and early 30s. It’s the largest deal by a USA -based company since Facebook’s 2012 public debut. The company priced itself at $17 per share Wednesday afternoon, positioning it to be the largest technology debut since Alibaba’s in 2014.

With that continued IPO boom, Snap has avoided the curse of Facebook (FB, Tech30), but maybe not the curse of Twitter (TWTR, Tech30).

Moreover, 26-year-old Spiegel will continue to hold a stake of about 17 percent in the company, valued at $4.05 billion.

But despite Snapchat’s popularity, user growth has slowed recently.

Local analysts hope the Southern California deal will inject new life into the Bay Area’s IPO market after a sluggish 2016.

Despite a almost seven-fold increase in revenue, Snap’s net loss widened 38 per cent past year to US$514.6 million. Meanwhile, Snap’s chairman Michael Lynton planned to sell nearly 55,000 shares in the offering, bringing in more than $930,000.

They will need to put on a good show – it’s not just Facebook that they need to beat, but the rival start-ups that are constantly jockeying for attention on the tech scene.

Sacca also lightheartedly lamented not investing in the ephemeral messaging company when he had the chance and posted a short email from Snap co-founder Bobby Murphy from Nov 2012 after the two apparently had a conversation.

The shares were more than ten times oversubscribed, Reuters said. The company now has about $2.3 billion in cash to use for acquisitions, new hires, product development or whatever else it chooses to do.