Snapchat owner Snap Inc rode a wave of euphoria in its Wall Street debut Thursday as investors sent shares of the popular messaging app soaring. Snap jumped 44 percent to close at 24.48 US dollars in its inaugural trading day, after raising 3.4 billion US dollars in the richest US tech company listing since Facebook in 2012.
The California startup known for its disappearing photo messages priced its offering Wednesday at 17 US dollars to give it a market value of 24 billion US dollars. The strong debut lifted its value to 28 billion US dollars, or more than double that of social media rival Twitter, which went public in 2013.
Snapchat co-founders Bobby Murphy, chief technology officer of Snap Inc., and Evan Spiegel (R), chief executive officer of Snap Inc., smile at each other after ringing the opening bell as Thomas Farley, president of the NYSE, looks on, March 2, 2017 in New York City. /CFP Photo
Analysts have offered mixed views on the future of Snap, debating whether it can mimic the success of Facebook or end up in the tech junkyard.
Debra Williamson of the research firm eMarketer said Snapchat inspires the same kind excitement as Facebook in its early stages. "This is a company that is fundamentally changing communication," she said.
A woman wears Snapchat Spectacles on the floor of the New York Stock Exchange (NYSE) while waiting for Snap Inc. to list their IPO in New York, US, on March 2, 2017. /CFP Photo
"This makes Snapchat as exciting a property as Facebook when it launched. And it has a lock on the youth market which is critically important for new technologies."
Snapchat has more than 158 million daily active users creating 2.5 billion "snaps" a day in 20 different languages. It expects 936 million US dollars in revenues in 2017, and has partnerships with major brands and publishers.
IPO at the New York Stock Exchange, on March 2, 2017, in New York. /CFP Photo
While most of its users are under 30, it has been gaining traction with older smartphone users as it expands its offerings of content from its media partners.
Some analysts are skeptical about Snap, however, pointing to the example of Twitter, which has seen only modest increases in its user base since its 2013 IPO, and now trades well below its offering price.
It remains unclear if Snap can expand beyond its core base of young users or how it will fare in many international markets in a competitive social media landscape.
(Source: AFP)
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