Tech IPO Everyone's Been Waiting for: Snap
- Author: Stacy Allen Mar 03, 2017,
Mar 03, 2017, 0:18
Would Snap be offering a fun, affordable alternative to the current drone enthusiast market, now dominated by professional-leaning drones like DJI's Phantom? He added that Snap's focus on the camera was similar to experiments being done by Facebook Inc (NASDAQ: FB) with Virtual Reality and Augmented Reality.
Snap Inc on Wednesday priced its initial public offering (IPO) above its target range, raising US$3.4 billion as investors set aside concerns about its lack of profits and voting rights for a piece of the hottest tech offering in years. According to the latest SEC filing at the end of February, Spiegel and Murphy plan to sell 16 million shares each on Thursday, a small fraction of the number of shares the co-founders have in Snap, but it's still enough to make them incredibly rich.
Snap Inc.'s debut on the NYSE this morning looks like a big hit, and has been described as "the biggest tech listing in years". Demand for shares by institutional investors was said to be oversubscribed several times over. In addition to Instagram's massively popular Stories feature, WhatsApp, another Facebook-owned company, launched its own version of Stories last month. At that price, it has a market value of about US$20 billion, based on 1.16 billion shares outstanding after the IPO. After adding 36 million daily active users during the first half of past year, Snapchat picked up just 15 million in the second half.
"Just six years ago", says CNN money, "Spiegel was working on a failed start-up called Future Freshman, which he later said was used by "no one ... except my mom".
Snap argues its value is in the length of time its users spend on the app, as well as the revenue opportunities that will arise through the growing trend of young people using video to interact with each other instead of text.
Snap's social media app has 158 million average daily active users as of Q4 2016.
Snapchat's growth, however, is being driven more and more by older users, according to the research firm eMarketer.