Snapchat Might Be Building a Drone

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

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

Snap began trading at $24 per share, representing a 41% increase on the initial offer price which was at the top end of market expectations. Some are hoping that Snap's debut can revive a lagging IPO market, as Barron's reported, and encourage other tech firms to make their debuts. An ex-employee also recently accused the company of faking positive stats to inflate its value, throwing its current estimated price into question.

At $24 billion, the IPO valuation was more than double the size of rival Twitter and the richest valuation in a United States technology IPO since Facebook in 2012.

In early February, Snap released its financial statement for 2016, reporting $404.5 million in revenue - nearly seven times the $58 million reported in 2015.

According to CNBC, co-founders Evan Spiegel and Bobby Murphy each made $384 million from the sale of their shares.

Any new tech IPO would receive lots of attention, he notes, and while "there are many questions" about Snap's future-i.e., its ability to turn a profit, the company "has many things going for them", Kennedy says.

Meanwhile, signs of strong demand for Snap stock among investors are already there.

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This puts the company's valuation at $24 billion, and allowed it to raise around $3.4 billion in funding. He calls the company "an upstart facing aggressive competition from much larger companies, with a core user base that is not growing by much and which is only relatively elusive". After adding 36 million daily active users during the first half of previous year, Snapchat picked up just 15 million in the second half. Its revenue per user sits at $1.05.

Launched in 2011, Snapchat now has 158 million daily users.

The value of Snapchat's owner has soared on its New York Stock Exchange debut after a flotation that valued the company at an initial $24bn (£19bn).

The number of people downloading Instagram's app has been accelerating during the past six months, suggesting a gradual shift away from the Snapchat app, based on an analysis of activity in Apple's app store from financial advice site ValuePenguin.

Kids, teens, and young adults are the ones who use Snapchat the most, but it's the older generations who are more likely to be investors.