News Worms
News Worms

Evan Spiegel's friends might just have made a killing on Snap's IPO

Evan Spiegel's friends might just have made a killing on Snap's IPO

Snap Inc's in-demand shares are set to start trading in NY on Thursday after the owner of the popular Snapchat messaging app raised $3.4 billion in its initial public offering (IPO) on Wednesday, above its price expectations. Snap, by the way, lost more than half a billion past year.

Snap (SNAP) is slated to begin trading on the NYSE Thursday morning, under the ticker SNAP.

Snap's net loss ballooned 38 percent a year ago to $514.6 million even as it grapples with fierce competition from rivals such as Facebook's Instagram, says Reuters.

That's far, far, and away above the price Snap set last night, $17 per share, when the company raised $3.4 billion - a 44 percent increase.

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Snap is targeting a valuation of between $19.5 billion and $22.3 billion for its listing on the New York Stock Exchange on Thursday.

Snap shares scored an initial pop of almost 40 percent when they started trading on the public market Thursday.

The firm's inital public offering (IPO) is the biggest for a USA tech firm since Facebook in 2012 and will turn the company's founders, Evan Spiegel and Bobby Murphy, into multi-billionaires.

Daily normal volume was around 10 times higher on Snap's IPO than a typical day, according to Schatt.

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After a long drought for tech offerings, Snap's IPO is the nerviest stock-market debut in years, in more ways than one.

Spiegel, 26, made $2.4 million as CEO in 2016, but has said he will reduce his annual salary to $1 now that he's a billionaire.

That places a current valuation of Snap at $28bn, with Evan Spiegel and co-founder Bobby Murphy's holdings worth about $5bn each. Plus, the Snapchat founders' shares are likely worth significantly more than the Snap stock that was sold to the public.

Snap, which brings in the bulk of its revenue from advertisements in filters and promoted stories on Snapchat, could use the funds from an IPO for acquisitions of additional virtual-reality companies. They could always sell their shares, of course. After all, Snap's shareholders will still retain one lever of control: "Investors can vote with their feet", Feldman says.

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