No compatible source was found for this media.
Snap Opens at $24 on NYSE as Shares Surge
Snap Inc., maker of the disappearing photo app that relies upon the fickle favor of millennials, jumped in its trading debut after pricing its initial public offering above the marketed range.
Shares opened at $24 and traded as high as $25.42 apiece Thursday, giving the company a market valuation of about $29 billion, based on the total number of shares outstanding after the offering in the deal prospectus.
Snap sold 200 million shares in its IPO at $17 each, above the $14 to $16 marketed range. Its market valuation at the IPO price, of about $20 billion, implies a multiple of about 21.4 times EMarketer’s estimate for Snap’s 2017 advertising sales. Snap went public at a valuation at least twice as expensive as Facebook Inc., and four times more costly than Twitter Inc.
“Snap presents investors with the opportunity to invest in the company behind an innovative, large-scale, and distinctively young-skewing platform,” said Brian Wieser, an analyst at Pivotal Research Group LLC. “Unfortunately, it is significantly overvalued given the likely scale of its long-term opportunity and the risks associated with executing against that opportunity.” He gives Snap a sell rating.
Snap raised $3.4 billion in its IPO, in the biggest social-media IPO since Twitter more than three years ago. It’s also the first tech company to list in the U.S. this year.
After ringing the stock exchange’s opening bell Thursday, Chief Executive Officer Evan Spiegel and co-founder Bobby Murphy headed to Goldman Sachs Group Inc.’s offices in lower Manhattan to await the first trade, according to a person familiar with the situation. Shares opened almost two hours later.
Goldman Sachs and Morgan Stanley led Snap’s offering, and Goldman Sachs is also the stabilization agent, tasked with ensuring the first day of trading goes smoothly.
“There is a huge amount of people who really just want to get in on the hot new thing, who see this as the first opportunity of its type in a number of years,” David Kirkpatrick, chief executive officer of…