Snap Inc soars in stockmarket debut, shares up 47%

Outlining the financial details of its initial public offering, Snap Inc. said it expects net proceeds of some $2 billion

Signage for Snap Inc., parent company of Snapchat, is displayed on monitors on the floor New York Stock Exchange (NYSE) before the opening bell, March 2, 2017 in New York City.

The company will reap about $2.3 billion in net proceeds from the sale of 200 million shares of Class A common stock.

Snap began trading on Thursday morning, with its shares surged from their offer price of $US17 to $US24, giving the company a market cap of more than $US33 billion ($A44 billion).

Evan Spiegel, Snap's secretive 26-year-old CEO and cofounder, is credited with being the company's guiding force and product visionary. That's a 44% rise on opening day, so to say that this IPO was not a much anticipated one, would be wrong.




The company also needs to convince investors to put their complete trust in its management, as it is listing non-voting shares, the first company to do so in the United States, according to its deal filing.

Goldman Sachs and Morgan Stanley led Snap's offering, and Goldman Sachs is also the stabilisation agent, tasked with ensuring the first day of trading goes smoothly. Co-founders and majority holders Mr Spiegel and Mr Murphy will be responsible for the decisions that lead to Snap's success - or on the hook for its mistakes.

Facebook stock, of course, has done well, while Twitter shares have fizzled. Unlike Spiegel, he's not entitled to a generous CEO Award. The firm also sold more than 10 million shares in the IPO, netting about $182 million. Murphy's remaining stake is worth around $4.8 billion.

"Unless Snapchat's stock price falls apart in coming months, the ability to get its IPO off the ground successfully should embolden those other young, richly valued tech companies with high revenue growth but finances that need some work", Bloomberg columnist Shira Ovide wrote. "It's a happy day at Lightspeed". Chairman Michael Lynton holds $71 million worth of shares. His stake in Snap is now valued at $71 million. But the fairly steady orders showed the bankers did a decent job. On paper, they've just made millions of dollars.

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