Michael Lynton, chairman of Snapchat’s parent company and outgoing CEO of Sony Pictures Entertainment, sold $933,419 worth of stock in Snap Inc.’s initial public offering Thursday, according to regulatory filings.
Reps for Snap did not immediately respond to a request for comment. Snap will be raising almost $2.5 billion in its IPO.
And though Snap has yet to make a profit – the company lost $515 million previous year, many analysts say one of the biggest worries investors have about the deal is the fear of missing out. Snap filed plans to sell 200 million shares. In November, it expressed hopes for a valuation in the $20-25 billion range.
Bobby Murphy, Snap’s 27-year-old cofounder and chief technology officer, stood alongside Spiegel to ring the opening bell at the New York Stock Exchange.
The flotation values the business at $24bn, although Snap has never made a profit. In 2015, it reported losses of $372.9 million; a year later it documented a loss of $514.6 million. Father of two St. Francis students, his company led an investment round for Snapchat’s two founders.
“It’s going to be bringing a different type of investor to the table”, Zell says. Whether or not Snap can maintain momentum has been a topic of great debate.
This puts the company’s valuation at $24 billion, and will allow it to raise around $3.4 billion in funding.
“We don’t want to encourage this kind of bad behavior”, Mastagni said, referring to Snap’s non-voting share structure. “However, we are not contemplating any material acquisitions at this time”.
The Snapchat app is popular with the young people and is best known for disappearing messages and quirky face-filters.
Facebook stock, of course, has done well, while Twitter shares have fizzled. It said it expected to derive most of its revenue from advertising, where it will compete against rivals such as Google, Facebook and Twitter.
Murphy and Spiegel’s total net worth, of course, could actually be much higher than the $5.6 billion estimate, as that does not account for houses, cars, or other valuables they may own.