Snapchat Shares Up 44% After First Day Of Trading
Shares in Snapchat parent company Snap rose 44% at the close of its first day of trading, up from the IPO price of US$17 per share.
Snap shares traded between US$23.50 and US$26.05 on the company’s market debut, before closing at US$24.48. This gives Snap a market valuation of US$28.3 billion, or about $37.4 billion.
The Financial Times reported that the current value of the company is about two and a half times higher than Twitter, but significantly lower than Google’s US$580 billion and Facebook’s $395 billion valuations.
Snap recorded US$514.6 million in losses last year, despite revenue growing from US$58.7 million in 2015 to $404.5 million in 2016. The company is reportedly working on a drone that could add to the success of its first entrance into physical products with Spectacles.
200 million shares were sold at the IPO price of US$17 per share. But most investors are unable to access shares at the IPO price, which are instead reserved for much larger scale investors.
Analysts said Snap’s listing was well timed following the election of Donald Trump as president, with a 10% rise in the S&P 500 since election day driven by proposed tax reforms for businesses in the US.