US school makes $24m in a Snap
san francisco — A California high school has made millions of dollars from the initial public offering of shares in Snap Inc, the company behind the Snapchat photo messaging application.
The board of the Saint Francis high school in Mountain View agreed to invest $15,000 in seed money in Snap in 2012, when the company was just getting started.
They had been invited to do so by one of the student’s parents, a venture capital investor, the high school president says in a letter issued to the school community on Thursday.
The school held onto the investment until this week, when Snap shares sold for $17 each in an IPO. The share price rocketed another 44 per cent higher when trading began on Thursday.
The school was quoted by media including website Quartz as saying they sold two-thirds of their shares at $17 each, to raise $24 million. “The school’s investment in Snap — which this morning announced the completion of its IPO — has matured and given us a significant boost,” said the high school president, Simon Chiu, in the letter. Co-founders see $3.2b gain Snap’s Evan Spiegel and Bobby Murphy each added $1.6 billion to his fortune on Thursday after shares in the photo-sharing mobile app closed at $24.48, 44 per cent above their listing price. Investor appetite for the first technology listing of the year boosted the net worth of each co-founder to $5.3 billion, propelling Spiegel, 26, and Murphy, 28, up more than 150 places on the Bloomberg Billionaires Index, a daily ranking of the world’s 500 richest people.
The first-day jump may not be an indication of what happens to their fortunes from here. Twitter soared 73 per cent on its opening day yet now trades at $15.67, 40 per cent below its IPO price. Facebook’s listing was plagued by trading errors with the shares barely gaining on its first day before falling 31 per cent in the first year. The stock has since risen 260 per cent above the IPO price.
Snap raised $3.4 billion in Wednesday’s initial public offering when it sold 200 million shares for $17 each. The Venice, California-based company has a market value of about $28 billion despite posting a net loss of $515 million last year, according to the IPO prospectus. Revenue climbed almost seven-fold in 2016, to $404 million from $59 million.