UPDATE [9:55 p.m IST]: After an hour-long wait, Snap finally makes its much-awaited NYSE debut at $24 per share. This means it is trading about 41 percent above its initial price of $17 per share. And debuted at an increased valuation of $33 billion, as compared to the targetted $24 billion. Currently, due to high investor interest, the stock price has started seeing uprise — with minimal troughs. It is currently trading in the ballpark of $24.30 to $24.85 and has crossed the $25 mark once.
UPDATE [9:40 p.m IST]: Well, it seems both investors, as well as independent traders are lining up, waiting for SNAP (stock ticker name on NYSE) to begin trading. This is further building pressure on the opening auction, says WSJ.
Thus, the latest indication pricing for Snap now stands between $23.50 to $24.50 per share. This means that the stock is expected to open about 44 percent higher than its initial price of $17 per share. Also, this furthers the company’s valuation, which now stands at a monstrous $34 billion at the high-end of the price range.
PREVIOUSLY [9:12 p.m IST]: By ringing the opening bell at New York Stock Exchange this Thursday morning, Snap Inc (formerly known as Snapchat) co-founders Evan Speigel and Bobby Murphy have officially marked the debut of their company on the stock market. This is one of the most highly anticipated technology IPOs and was priced at $17 per share. But, market analysts suggest that it’ll make its debut at $22, which is 30 percent above the initial price.
The share is expected to start trading on the NYSE in a meanwhile, as specialists are currently involved in the price-discovery process. It means that they are analyzing and matching the total number of buy and sell orders for the stock presently submitted. The process is taking so much longer because of the massive size of Snap’s IPO, which was oversubscribed 12 times. This means offers received for its shares are twelve times more than the number of shares offered. It had made 200 million Class A non-voting shares available through its initial offering.
While we wait for the company to finally start trading, here’s a treat for you:
Oh $SNAP pic.twitter.com/z9JhUGwLLU
— NYSE (@NYSE) March 1, 2017
With its debut, Snap is hoping to go public with a massive valuation of $24 billion (less that the initial assumption of $25 billion) and plans to rake in around $3.4 billion in the process. And if analysts are to be believed, then Snap may actually be able to achieve these figures today. Over the last few days, the company behind widely popular ephemeral messaging app Snapchat had been organizing its roadshow to muster investors interest in their venture. And well, a lot of them seem to be convinced by the value propositions being offered by the ‘camera company’.
But, if we look closely at Snap then it doesn’t really have anything going on with it at present. When the company revealed its finances during the IPO filing process, we got to know that the user growth was declining (courtesy of Instagram Stories). Still, the messaging app has a loyal user base of around 158 million users who’re sending 2.5 billion snaps on the daily. Further, Snap’s cost of revenue is somewhere in the ballpark of half a billion, with the net loss for 2016 also a tad bit over the said figure. It has, however, advertised that its advertising revenue grew sevenfold, from $59 million in 2015 to nearly $400 million in 2016.
But, what’s more unsettling for investors and even individuals who’re putting their money into Snap is that they won’t be having a say in the functioning of the company. Snap has offered them non-voting stock, so those not exiting when the stock debuts in a while will have to place their faith in the management. These individuals will have to trust their instincts to see Snap outgrow its current state & compete against its copycat rivals.
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