Snapchat Parent Stock Surges in Market Debut

The roughly 50 million shares are designated for new Snap IPO investors who do not now have a stake in the company, the sources said.

Snap (SNAP), the parent company of Snapchat, jumped 20% in early trading Friday, rising above $29 a share. After opening at $24 per share the shares have continued to rise – and are now 60% higher than the IPO price.

Despite a almost seven-fold increase in revenue, the Los Angeles-based company’s net loss widened 38% a year ago.

Shares of Snap soared 19% Friday morning, compared with the S&P 500 SPX, -0.16% which was down less 0.2%.

With a full greenshoe option to issue more shares likely to be exercised, the company is poised to increase its deal size to US$3.9 billion.

“It is a great day for Snap to go public”, said Rohit Kulkarni, managing director and head of research at private securities investment outfit SharesPost.

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

Snap launched its first hardware product called Spectacles in September. It’s also the biggest social-media listing since Twitter Inc., more than three years ago, and the daily compulsion of more than 150 million – mostly millennial – users.

“Based on current price its market cap exceeds the likes of BAE Systems, Anglo American, Aviva, Tesco and Standard Chartered and is about the same as RBS”. It’s price per share is set at $17. CEO Evan Spiegel, 26 is known for running the company the way he wants, gaining him a reputation for being controlling and arrogant.

Nonvoting shares means that investors who buy Snap stock, which will trade under the ticker SNAP on the New York Stock Exchange, won’t be very attractive to activist investors.

Snap’s share price rose by nearly 50% in value at one stage yesterday and closed 44% higher at $24.48.

The Times notes that there is no release date for Snap’s drone, and it is possible that the project – like many other gambles from today’s biggest tech companies – could ultimately be scrapped. Apparently, the company still relies and spends so much money on Google and Amazon for its cloud and web services needs.