Snap Chat Just Went Public And … Wow

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Robert Donachie Capitol Hill and Health Care Reporter
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Snap, Inc., the parent company of the disappearing photo-messaging application Snap Chat, just went public, opening at $23.64 a share.

The company raised its price offering Wednesday to $17 a share, up from initial expectations of between $14-$16. Just before initial trading figures posted Thursday morning, predictions continued to trend upwards, going as high as $24 a share.

The last-minute increase in its IPO, trading under the symbol “SNAP,” signals a spike in demand for a stock that has captivated investors since the firm filed in 2016.

Snap’s IPO is the biggest new tech stock to hit the market since Alibaba in 2014. Financial analysts pegged Snap’s total market value at nearly $24 billion, up from initial valuations by private market investors of $17.8 billion. Snap’s valuation is also double that of its rival of Twitter, and the largest for a U.S. tech IPO since Facebook. The $24 billion valuation also put the company right in their targeted range between $20 and $25 billion.

The increase in both the stock price and market value come after Snap’s executives made rounds across the U.S. and Europe to attract investors. By meeting with potential investors, Snap is hoping to evade a quick surge in price after the opening, which could signal investors that the initial price was too high — a major concern expressed by potential investors.

Some concerns could be squelched by the fact that Goldman Sachs is managing Snap’s price-setting, and will assist in any additional allocation of new shares to underwriters.

Many observers view Snap’s early performance as an indicator of what future technology IPO’s can bring. There are, however, investors who believe that Snap’s platform is unique, and may not be the litmus test for future tech companies looking to go public.

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