Snapchat Prices Shares at $17, Bringing Company Valuation to $24 Billion

Shares in Snap, owner of messaging app Snapchat, have begun trading on the United States stock market.

Because SNAP shares gained so much value, the company is already worth – on paper – more than household names like CBS and American Airlines.

“It’s also the first to go public among a class of companies, including Uber, Airbnb and Pinterest, that have been valued at more than $10 billion while still privately held”, it added.

Some analysts are expressing pessimism about the immediate future of the stock, pointing out that Snap’s fundamentals are closer to Twitter than Facebook.

Snapchat is valuing itself at 49 times revenues – compared to Facebook’s 27 multiple when it floated.

Chiu was convinced to chip in by the venture capitalist father of two pupils, Andrew and Natalie Eggers, who saw how his children and their friends were obsessing over the social app.

Snap has had to convince potential investors that it won’t have the same trajectory as Twitter has, a company that has been struggling constantly ever since its IPO, despite massive optimism shown both by the company and investors.

In addition, Snapchat has been expanding its partnerships to offer a variety of content from media groups such as Vice, CNN and the New York Times. Each founder sold 16 million shares in the IPO, likely netting $200 million a piece after assumed taxes. That’s a 41 percent increase from the $17-per-share bar the company set Wednesday night.

But Snap’s offering stands apart, and not just because of its size. celebrityinsider.org

And it is not clear if Snapchat’s founders have what it takes to grow into a major force, he cautioned.

The New York Stock Exchange carried out a trial run last week to make sure the third-biggest ever technology IPO goes smoothly. The stock has since risen 259 percent above the IPO price.

Snap also has departed from tech sector tradition by operating without a campus, with its employees scattered in various locations around its Southern California base.

“What that number means for the longer term – very little”, said Chi-Hua Chien, managing partner at Goodwater Capital who originated the VC firm Accel Partners’ investment in Facebook and later invested in Twitter while at another firm. “It is a total disaster at anything beyond that”.

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