Snapchat parent company, Snap, closed its first day of trading with a stockprice of US$24.48, giving the messaging app a valuation of US$28.3 billion.
Snap priced its initial public offering of 2 billion shares of Class A common at US$17 per share, for a total offering size of US$3.4 billion – higher than the US$3 billion it said it aimed to raise when it filed papers for its IPO with the SEC last month.
The stock, which began trading on the New York Stock Exchange yesterday under the symbol ‘SNAP’ quickly climbed in value and in pre-market trading today stands at US$24.75.
Bloomberg estimates Snap founders Evan Spiegel and Bobby Murphy are now worth US$5.3 billion each, boosting them 150-places on the ‘Bloomberg Billionaire Index’ to number 280 and 281 respectively.
Snapchat’s IPO paperwork revealed last month that the service has 158 million daily users, recorded revenue of US$404.5 million for full year 2016 and made a net loss of US$514.6 million for the same period.
Snap, which describes itself as a “camera company”, said it competitors span from “internet technology companies and digital platforms to traditional companies in print, radio, and television sectors to underlying technologies like default smartphone cameras and messaging.”
Research firm Ampere Analysis claims that Snapchat’s ascent will “change video forever”, noting that half of all Snapchat video viewers are under 25 – compared to 36% for Instagram, 23% for Facebook and 17% for YouTube.
“Snapchat is unlike any other social media video platform in the audience it attracts and the way it impacts viewing behaviour, offering some clue to the huge valuations being placed on the platform for its impending IPO,” said the research note.
Ampere said that Snapchat’s young viewing base, combined with the rise of digital native content as an outlet for brands and professional video, means that company’s value “becomes clear”.
Separately, eMarketer predicts that 70.4 million Americans to use the Snapchat platform this year – up from its previous estimate of 66.6 million users.
It said that much of Snapchat’s growth is being driven by older Americans and estimated that this year 6.4% of Snapchat’s users will be aged 45-54.