Snapchat share price soars on market debut
Snapchat shares climb 44 percent in the firm's first day of trading on the United States stock market.
The messaging app firm's initial public offering is the biggest record for a US tech firm since Facebook in 2012 and could potentially turn founder's Evan Spiegel and Bobby Murphy into multi-billionaires.
On Thursday's close of trade, Snapchat shares were $24.48 each from the firm's opening offer price of $17 per share. Snapchat was left with a value of almost $30 billion even though it has never made a profit. This is the biggest earning value recorded for a tech company ever since 2012. Snapchat founders could now rest easy on their couches as they are on the path of becoming the next multi-billionaires.
Last February, Snapchat revealed its revenue of $404 million for 2016 although it made a loss of $515 million. The company's losses spread last year as it faced intense competition from larger rivals such as Facebook. Unlike Zuckerberg's tech giant, the audience of Snapchat is limited to teenagers and adults in their twenties because of its simplified yet techy features. The messaging app allows users to send images and messages that vanish after 24 hours.
Analysts offered their two cents on the Snapchat valuation results and some said the fresh tech company was overvalued.
"Unfortunately, it is significantly overvalued given the likely scale of its long-term opportunity and the risks associated with executing against that opportunity," Brian Wieser from Pivotal Research wrote in a note. On a positive note, Jordan Hiscott at Ayondo Markets praised its innovative features such as the lenses function.
The chief trader said the firm's take on the innovation is what sets it apart from other messaging apps like WhatsApp. He commended Snapchat for pushing with its "camera company" name than a messaging service. "This seems to be an intentional move to differentiate it from Facebook and Twitter and the success and failure of their respective IPOs, which in my view, is very clever," he noted.