California high school makes $24 million from Snapchat IPO

Snap also wants to avoid the fate of Twitter, which came public in May 2013 amid sky-high expectations.

The main question for investors ahead of the Initial Public Offering (IPO) was whether Snap represented a good financial bet given varied performances for similar stocks since their own market bows.

At that price, Snap has a market value of about $20 billion, based on 1.16 billion shares outstanding after the IPO.

After opening above the pre-decided range of $14-$16, Snap stock closed a healthy 44 percent up from the opening price.

And $1 billion now looks like a bargain compared to what investors are paying for Snap.

Achieving this pop and still ensuring that it was a successful IPO is not always so simple. Twitter, on the other hand, surged 73% in its first day of trading, but less than two months later started on a downwards trajectory that it’s yet to recover from. The IPO book was oversubscribed by more than ten times, which indicates that today will be a hit for Snap.

The Snapchat parent soared in its debut, but investors should wait for a wider margin of safety on this ‘camera company’.

But you probably won’t be able to avoid non-voting Snap stock for long.

Snap co-founder Evan Spiegel and Bobby Murphy showed up to the floor of the exchange and rang the opening bell to mark the first day of trading. “They would need to grow for the next 10 years at more than 50 percent every year with a profit margin of 25 percent, which is extremely high given that they are now losing money rapidly”. While Snap touts its employees’ volunteer hours, neighbors are anxious about the impact the multi-billion company is having on the area. Snap is also pretty aggressive on the acquisition front, which means it needs a lot of capital to continue buying up startups.

At the high, Snap’s market value is now hovering around $40 billion.

Demand for the shares was almost 12 times oversubscribed – and this from a company that not only has never made a profit (and lost $500m last year). The company’s stock has made most of its journey upwards.

“It has a promising and innovative advertising offering, but so far it is still mostly unproven and hard to quantify its ultimate scale”, he added.