Long-awaited IPO for Snap Inc. raises $3.4B, surpasses expectations

Andrew Cummings
March 4, 2017

Venice residents and business owners are upset with Snap's growth in the community, complaining that the company behind Snapchat has gobbled up once vibrant shopping and restaurant locations and converted them into boring office space.

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

A year-long lock-up period is atypically long, potentially signifying strong demand for the IPO, says Lauren Hirsch who covers the story for Reuters.

Traders on the floor of the New York Stock Exchange are now waiting for the first trades in Snapchat, one of the most highly-anticipated public debuts on the NYSE in years.

Snapchat debuted on the New York Stock Exchange as SNAP today, opening at $24 per share.

A private high school in California earned millions from the Snap Inc. public offering, after two students told their dad about the popularity of the app five years.

The flotation valued the company at $US17 a share, or $US24bn in all, although Snap has never made a profit.

New shares being issued in Snap won't carry any voting rights, meaning co-founders Evan Spiegel and Bobby Murphy will still exercise control over the company's decisions.

Investors may not hear from other analysts for awhile.

The fact that Snap's stock popped leads some to suspect that more technology IPOs could be in store as other unicorns - privately held companies worth $1 billion or more - decide to try their luck in public markets.

They will list on Thursday on the New York Stock Exchange. It helps users communicate with one another mostly by using pictures and videos, or snaps, on its Snapchat mobile app.

Snap's IPO also is the first notable tech IPO of 2017.

Benchmark Capital, Lightspeed Venture Partners, and General Catalyst are among the investors that planned to sell shares. In our view, Snap shares are overvalued, and we would wait for a pullback and a margin of safety before investing in this very high uncertainty name.

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