Snapchat parent rockets higher in Wall Street debut
For Snap, the looming question now is whether investors are in for a trick or a treat
The company behind Snapchat is trading sharply higher in its Wall Street debut.
Snap Inc jumped $7, percent, to $24 a share.
It had priced its initial public offering of 200 million nonvoting shares at $17 each on Wednesday. That’s above the expected range of $14 to $16.
Snap Inc passed its first major test on Wall Street on Wednesday as it priced its initial public offering of 200 million shares at $17 (Dh62) each. That is above the expected range of $14 to $16 and values the Los Angeles company at $24 billion.
Snap’s IPO is one of the most anticipated for a technology company since Twitter’s stock market debut in 2013. Co-founders Evan Spiegel and Robert Murphy will retain controlling power over all matters at Snap, the Class A stock being sold in the IPO has no voting power. Snap is getting the ticker symbol “SNAP” on the New York Stock Exchange.
For Snap, which started its official bid to go public last Halloween, or 41 The dollar extended gains as hawkish signals from the Federal Reserve continued to pile up, while stocks in Europe took a breather after Wednesday’s global rally. Oil and gold both fell.
The greenback headed for the longest winning streak since May and gold retreated as Lael Brainard became the latest Fed official to support the case for an interest-rate hike “soon.” Record-high US crude stockpiles sent oil toward its longest losing streak in two months. Europe’s benchmark stock gauge edged lower after the biggest jump since November on Wednesday.
The dollar rose 0.38 per cent against a basket of six major currencies to 102.17, its highest since January 11.
The greenback was last up 0.64 per cent against the Japanese yen at 114.43, the highest since February 15 and gained 0.41 per cent against the euro to $1.0503.
Investors are coming to grips with a week in which data indicated global growth is firming. the looming question now is whether investors are in for a trick or a treat.
Snap’s Snapchat app is best known for disappearing messages and quirky facial filters for jazzing up selfies. It’s popular with teenagers and younger millennials. While Facebook launched in the era of desktop computers and Twitter in textbased mobile, Snapchat jumped straight to photos and videos. In a sense, it’s ahead of the game.
But its user growth has slowed down in recent months. Growth slowed to a crawl since Facebook’s Instagram cloned Snapchat’s “stories” in August. The feature helped Snapchat recover from stagnant growth before, but now it’s no longer unique to Snapchat. After adding 36 million daily active users during the first half of 2016, Snapchat picked up just 15 million in the second half.
The number of people downloading Instagram’s app has been accelerating during the past six months, suggesting a gradual shift away from the Snapchat app, based on an analysis by financial advice site ValuePenguin. While the higher-than-expected pricing looks good for Snap, its troubles aren’t over. Twitter, for example, shot up nearly 73 per cent on its first trading day and now trades well below its IPO price.
- AP