Snap shares set to debut after $3.4 billion IPO

After Snap Inc, the owner of the popular Snapchat messaging app raised $3.4 billion in its initial public offering (IPO) yesterday; the company's shares would start trading today.

Snap's IPO was oversubscribed by over ten-times, indicating an appetite for shares that might see the stock skyrocket, according to commentators when trading begins.

The New York Stock Exchange conducted a trial run last week to ensure that the third-biggest ever technology IPO went off without a hitch after Facebook's market debut in 2012 was marred by a technical glitch at rival exchange Nasdaq.

With the IPO pricing of $17 a share, Snap Inc notched a market value of roughly $24 billion, more than double the size of rival Twitter Inc and the richest valuation in a US tech IPO since Facebook five years ago.

The share sale comes as the first test of investor appetite for a social-media app that was a rage among people between 18 and 30 but had yet to convert its popularity into cash.

Even as it saw a seven-fold increase in revenue, the company's net loss had increased 38 per cent last year. It was now facing intense competition from larger rivals such as Facebook's Instagram as it grappled with slowing user growth.

According to commentators, Snap's IPO may be followed by IPOs of many technology start-ups valued at more than $1 billion by private investors over the next few years.

The IPO came on a day when the stock market shot to another high, fuelled by rising expectations of tax cuts, looser regulations and higher interest rates under the Trump administration.

Social media companies Facebook and Twitter also saw their shares rise.

The investor exuberance over Snap's offering came even as the California based company lost more than $500 million last year, and its explosive user growth appeared to be slowing. Also the fact that the shares would have no voting rights did not go down well with a number of large investors.