Should you buy the Snap IPO?

Carla Harmon
March 4, 2017

Most retail investors will not be allocated shares at the IPO price, so that uncapped offer can be filled well above the initial price.

The Initial Public Offering (IPO) will be priced after the USA stock market closes on March 1 and will see the company, which has yet to make a profit, be valued in the region of $20-25 billion (£16-20bn).

A Barron's Next primer ponders whether Snap will follow in the footsteps of Facebook (up 250% since its own IPO) or Twitter (not doing quite as well).

The news marks the last major piece of the puzzle before Snapchat officially becomes a publicly traded company on the New York Stock Exchange. Initial investors who were part of Snap's recruiting drive over the past few weeks posed a laundry list of questions and concerns to executives of the five-year-old company about the stock's potential, to sink or swim.


Back in 2012 the school invested $15,000 in a new app, Snapchat, that was being used by kids in the school.

Traders at the New York Stock during the Snap Inc. float. Snap's pricing valued the company at $24 billion.

Launched in 2011, Snapchat now has 158 million daily users. Snap is also growing quickly, generating revenue previous year of $404.5 million, more than six times what it generated in 2015.

The company has been vague on its plans to lead and monetize image-driven conversations, but has suggested investors put faith in the vision of its cofounder Evan Spiegel, whom it introduced in its investor roadshow as a "once-in-a-generation founder".


Ken Marlin, founder and managing partner of Marlin & Associates in NY, says buying shares of Snap on the open market is exactly that: Gambling. Slowing user growth, rising burn and a dependence on Google and Amazon for its services appear to be not enough of an issue to quell demand for the first tech IPO of the year - and one of the largest in recent memory.

The Venice, CA-based parent of social platform Snapchat had announced an offering of 200 million shares priced at $17.

"It got to the point that if I wanted to keep up with everyone's story, I'd have to sit on my phone and watch it for 25 minutes", she said.


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