Shares of Snapchat’s parent company were climbing 10% to $27.06 on Friday afternoon, after popping about 44% the day before. He has served on the Snap board since April 2013 and was named independent chairman in September 2016.
You could argue Snap’s underwriters priced it too low at $17 a share after it traded most of today between $24 and $25.
The company will reap about $2.3 billion in net proceeds from the sale of 200 million shares of Class A common stock. Meanwhile, Snap’s chairman Michael Lynton planned to sell nearly 55,000 shares in the offering, bringing in more than $930,000.
The company has managed to raise $3.4 billion at $17 per share after its initial public offering (IPO), making it the top tech listing since 2014, when Alibaba’s IPO broke all records.
Lynton, in addition to serving as Snap’s chairman, is on the board’s compensation committee and its nominating and corporate governance committee.
The surge on Wall Street has been seen as proof, at least for a day, that there is investor demand for young – but still unproven – tech companies. Twitter’s stock price soared for much of its first two months as a public company, only to begin crashing after its first earnings report. Snap will be raising almost $2.5 billion in its IPO.
The fact that Snap’s stock popped leads some to suspect that more technology IPOs could be in store as other unicorns – privately held companies worth $1 billion or more – decide to try their luck in public markets. Given the interest, Snap could have priced the shares at Dollars 19 each, the person said, but executives wanted to ensure that shares would make a decent gain in their debut. During the past few weeks, Snap executives and CEO Evan Spiegel met with investors in various cities to pitch the company’s stock and try to quell those concerns. It’s the largest deal by a USA -based company since Facebook’s 2012 public debut.
“It is significantly overvalued”, Brian Wieser, an analyst with Pivotal Research Group, wrote in an investor note Thursday.
Snap’s IPO filing left out details about historical trends for user metrics, he said – typically not a good sign.
Despite a almost seven-fold increase in revenue, Snap’s net loss widened 38 per cent a year ago.