Snap’s $17 a share IPO values firm at $24 billion

Millennials, those 14 to 35 years old, may be as exuberantly hyped a demographic as any in recent memory.

That generation has now helped power one of the biggest and most eagerly awaited stock market debuts in recent memory, making billionaires of the founders of the disappearing-message service Snapchat.

Investors, attracted by Snapchat’s hold on its millennial users — who check the app on average more than 18 times a day — flocked to the initial public offering, pushing the parent company, Snap Inc, to a valuation of nearly $24 billion.

The stock sale sets Snap up as the most valuable American technology company to go public since Facebook nearly five years ago. And it may herald a coming wave of unicorns — technology start-ups valued at more than $1 billion by private investors — that are expected to hit the public markets in the next few years.

Snap’s offering was priced on Wednesday at $17 a share — a dollar more than the previously expected pricing range. The pricing came on a day when the stock market surged to another high, fed by raised expectations of tax cuts, looser regulations and higher interest rates under the Trump administration. Shares of the social media companies Facebook and Twitter also rose.

Those buying into Snap’s offering did so even as warning signs have flashed over the company, based in California. It lost more than $500 million last year, and its explosive user growth appears to have hit a speed bump. And in a decision that has angered some large investors, the shares will have no voting rights, leaving control in the hands of the company’s founders, who can retain that power for years even after leaving Snap.

Snap Inc's shares continued to defy doubts about the company's early-stage business model and slowing user growth, jumping nearly 50 per cent in their first day of trading on the New York Stock Exchange. The question beyond this week is whether Snap will prove to be like mighty Facebook or embattled Twitter.

The owner of the Snapchat messaging app raised $3.4 billion in its initial public offering on Wednesday night, more than the $3 billion Facebook offered to pay for the company in 2013, and saw its market capitalisation bubble up to as much as $29.1 billion.

Much has been riding on Snap’s offering, including expectations that it will lift a moribund market in new stocks. In going public, Snap has leapt ahead of other technology darlings like Uber, Airbnb and the data-analysis provider Palantir.

After a nearly two-week road show for investors that spanned the country and stretched to London, demand for Snap shares proved robust. Bankers for the company received orders totalling more than 10 times the number of shares up for sale.

With a market value of almost $24 billion, including unvested stock options and grants, the company is now setting itself up with little room for error.

Throughout the presentations to investors, Snap executives and their advisers kept the emphasis squarely on the promise of what first seemed like a technological lark.